On May 12, President Trump signed an executive order titled “Delivering Most-Favored Nation (MFN) Prescription Drug Pricing to American Patients.” The rationale for the Executive Order was that “The Inflated prices in the United States fuel global innovation while foreign health systems get a free ride.”
Reference country selection
HHS provided guidance on setting benchmark pricing by considering the lowest price among a set of reference countries, defined by membership within the Organization for Economic Co-operation and Development (OECD) and a 60% of the US GDP per capita threshold:
MFN implications
Hypothetically, we consider how lowering the US price to the reference price would impact the global sales of a product. For this example, we use a large oncology product with 40+ indications and high global sales:
