Unpacking the Complexity of the Most Favored Nation Mandate

Drug prices, patient access, and pharmaceutical innovation drove the first part of a 3-part webinar series that will examine the impact of President Donald Trump’s May 12 Most Favored Nation (MFN) executive order.1 On September 10, Ned Milenkovich, PharmD, JD, chair of the health care practice at Much Shelist PC, moderated the in-depth discussion, “The Most Favored Nation Mandate: What the President’s Drug Pricing Push Means for Pharma, Payers, and Patients,” and he was joined by thought leaders representing experiences from life sciences commercial and market access strategy, health economics, health care investment banking, and strategic planning:

• Brian Corvino, MBA, principal and global market access practice leader, Deloitte US
• Neal Masia, PhD, co-founder and CEO, EntityRisk
• Ali Pashazadeh, MRCS, MBA, founder, chairman, and CEO, Treehill Partners
• George Van Antwerp, MBA, senior vice president, Prime Therapeutics

Ned Milenkovich, PharmD, JD | Image Credit: © Much Shelist PC

The complexity of the MFN mandate—which remains recommended guidance for the most part and not enacted policy measures2,3—and the uncertainty of drug pricing policy shaped the discussion, with highlights also punctuating their discourse that encompassed the MFN’s impact on patient access to treatment, potential stifling of pharmaceutical innovation as key players adjust strategy, health care system reform, and multistakeholder collaboration for policy design and implementation.

Policy Ambiguity and Market Uncertainty

“The current administration continues to lay groundwork for substantial changes in the drug pricing environment, specifically in the US,” Corvino said. “There's important connectivity, as we think about the Inflation Reduction Act, whether it’s the inflation guidance as well as direct negotiation, 340B drug price transparency, average sales price calculation, not to mention tax/trade/tariff policy, and state actions.”

Brian Corvino, MBA | Image Credit: © Deloitte US

He also stressed the necessity of a holistic examination of the current administration's drug pricing reforms, which, beyond the Inflation Reduction Act, includes direct negotiation initiatives.

Masia highlighted the inherent ambiguity of MFN legislation, likening it to European reference pricing models, also known as External Reference Pricing or International Reference Pricing. This is when governments examine and consider price points in other countries before setting their own.4 He suggested the administration's primary objective might be to bring the industry to the negotiating table to discuss direct-to-consumer models and lower drug prices, while also expressing concern about potential destabilization of the US market and the pervasive uncertainty it is seemingly generating for pharmaceutical companies.

“I think this is the administration saying to itself, what's the worst imaginable thing I think I can do within the bounds of my authority, to the industry, to get them to the table so that they will announce and change some behaviors?” he proposed. “You’re trying to solve a problem that is very, very tricky to solve with a blunt instrument that you know certainly won’t work but will work in the sense of the good and the bad.”

Neal Masia, PhD | Image Credit: © EntityRisk

He explained that the good is getting the industry to the table and thinking seriously about some of these direct-to-consumer models, while the downside is companies “writing off Europe for the foreseeable future, while they wait to see where this settles.”

Global Lessons: Europe’s MFN Experience

From a clinician's perspective, Pashazadeh, who is also a trained trauma and reconstructive surgeon, noted the "brain drain" observed in the UK from similar MFN policies—“we’ve lived through MFN in Europe,” he stated—and how what used to be centers of biotech innovation have all but disappeared. Scientists have also begun to make their exits, searching instead for not only better salaries but better pricing.

He highlighted the formidable challenges of US implementation, “keeping in mind that the FDA is going through a transition itself,” particularly concerning the current lack of an IPO market and biotech funding, with investors holding on to assets far longer than they previously have. It’s a perfect storm, he explained, when it comes to drug development and then commercialization.

Ali Pashazadeh, MRCS, MBA | Image Credit: © Treehill Partners

“I understand the logic of doing it, I understand the desire to get drugs to patients at a price parity that is comparable to other countries,” he explained. “I think the question is, how it's implemented and also the timing of implementation.”

Patient Access vs System Costs

Representing the pharmacy benefit manager (PBM) payer perspective, Van Antwerp acknowledged the pressing issue of high drug costs and the imperative for price reduction.

“One-third of the public right now is skipping doses or doing other things because they can’t afford their medications,” he said, “and I thank the administration and their efforts to try to lower drug costs, make them more accessible for consumers to stay on them, minimize out of pocket spend.” However, he also pointed to MFN pricing’s potential influence on the supply chain and advocated for greater transparency, emphasizing the necessity for creative solutions to drive down drug prices while mitigating negative impacts on the US market.

George Van Antwerp, MBA | Image Credit: © Prime Therapeutics

There are still plenty of unknowns, he noted, both in regard to what can be done to lower drug prices—“the US is paying 2.8 times what other similar type of countries are paying,” he stated—and what can be done to secure the supply chain, “because I think some of this is being used in coordination with tariffs, to look at how we onshore more development over the next 3, 5 years, because that's going to take time to do.” He also spoke of cross-subsidization and how the US is cross-subsidizing and keeping drug prices cheaper in other countries.

The webinar further explored potential winners and losers, those who stand to gain and who stand to lose from “this approach to drug pricing,” Milenkovich said.

Van Antwerp suggested the American public could be a beneficiary through reduced drug prices and improved access to innovative treatments and that this benefit would extend beyond insured individuals to those who are underinsured or even uninsured, while Pashazadeh reiterated his focus on the patient, exclaiming, “We've got legislature, we've got lawyers, and everyone else is going to negotiate this and put frameworks in place. If they keep in mind at the end of the day, there is someone's mother, someone's father, someone's child's who is going to pay the price, then we keep the same direction.”

Masia broadened the scope of impact, considering the various consequences drug companies, PBMs, and hospitals would have to shoulder and urging for wide-reaching innovative solutions.

Regarding the pharmaceutical industry's response, Masia predicted an acceleration of direct-to-consumer models and a re-evaluation of global investment strategies, and Corvino spoke of potential strategic responses from both large multinational biopharmaceutical companies and emerging biotechs, “thinking about that lens for which we’re talking about,” and pointing to the “thoughtful response between large multinational corporations vs emerging biotech.”

Is Innovation at Risk?

A critical question emerged: Does an MFN pricing strategy put research and development at risk?

“I think the US has long held itself as being a leader in pharmaceutical innovation, first to launch,” Milenkovich said. “MFN comes along, and other pricing policies are pursued by the administration. Does that put R&D at risk? Does pharma say, ‘it’s not worth it to us’?”

Pashazadeh underscored the importance of improving drug development success rates, and Masia stressed the significance of pricing and the need for novel solutions, stating, “It’s just such a confusing mess that nobody really knows what the price of a drug is.” The mandate's implications for market access are also substantial, with Van Antwerp touching on its potential impact on formulary design, rebate strategies, and PBM contracts.

A core concern remained whether MFN pricing would genuinely lower drug prices for patients, with the panelists raising several considerations: can the proposed legislation strike a balance between quality and affordability? Is it possible to innovate novel strategies to address patient out-of-pocket costs? Can health care be simplified and consumers actively supported?

Looking ahead, the panel agreed that any pricing strategies should prioritize a positive patient impact while minimizing negative consequences and involve health care providers alongside policy makers to confront the ongoing challenges of drug pricing and market access.

References

1. Bonavitacola J. Trump executive order could reduce pharmaceutical costs by 59%. AJMC®. March 12, 2025. Accessed September 12, 2025. https://www.ajmc.com/view/trump-executive-order-could-reduce-pharmaceutical-costs-by-59-
2. Rogers HA. Most-favored-nation prescription drug pricing executive order: legal issues. Congress.gov. June 5, 2025. Accessed September 12, 2025. https://www.congress.gov/crs-product/LSB11319
3. Joszt L. The future of drug pricing: most favored nation, PBMs, and patient access. AJMC. July 11, 2025. Accessed September 12, 2025. https://www.ajmc.com/view/the-future-of-drug-pricing-most-favored-nation-pbms-and-patient-access
4. Principles for application of international reference pricing systems. European Federation of Pharmaceutical Industries and Association. June 2014. Accessed September 12, 2025. https://www.efpia.eu/media/15406/efpia-position-paper-principles-for-application-of-international-reference-pricing-systems-june-2014.pdf