Impact Study: Trump’s ‘Most-Favored Nation’ Drug Pricing Policy

Most-Favored Nation
Drug Pricing Policy

Impact Study Proposal

Over the next several months, biopharma companies and payers must decide whether to join the voluntary MFN model, shape the policy conversation to their advantage, and realign business and product portfolios to fit the new market landscape.

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Delivered by a team of
health economists, policy analysts, strategists

MFN pricing could wipe out a quarter of industry EBIT

Losing the U.S premium starves the innovation capital that benefits tomorrow's therapies for all

Research & Development Throttle

MFN would jeopardize the hundreds of billions PhRMA members plan to invest in America.

Impact 1

Cascade into ex-U.S. markets

Lower U.S. list prices would roll through 20+ reference baskets, forcing global repricing.

Impact 2

Channel shock

The EO pushes a direct-to-consumer pathway that bypasses PBMs and wholesalers, flipping gross-to-net economics.

Impact 3

MFN’s deepest cuts fall where the pipeline is most loaded:Biologics

On the right: Current U.S. revenue exposure to MFN requirement is significant especially in the biologics (blue) vs small molecules (orange).

Risk is biologic-heavy

Biologics (oncology, immunology, GLP-1s) represent ~65% of U.S. revenue and carry the steepest MFN gaps (>30%).

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Biosimilar double-whammy

Assets facing MFN cuts and imminent biosimilar entry confront сompounding margin pressure.

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Small-molecule hedge is limited

Generics and cardio therapies show shallow or negative gaps but contribute too little EBIT to offset specialty losses.

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Pipeline inertia matters

80% of late-stage assets sit in therapy areas with >25 % MFN gaps, expanding exposure post-2028 launches.

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Five levers to protect innovation under MFN

There is no playbook for such a policy shift: We will learn as we go applying health economics concepts

#	Lever	Horizon	Action plan	Indicative EBIT protection
1	Re-price corridors	Immediate	Cut U.S. list prices just enough to meet MFN and widen ex-U.S. discounts to keep reference baskets neutral.	+5-7pp
2	Launch resequencing	Mid-term	Flip launch order: EU → Japan → U.S. so MFN references lag 12-18m; delay U.S. exclusivity clock only where sales mix tolerates.	+2-4pp
3	Value-based contracts	Immediate	Use CMS “multiple best price” safe harbor to lock-in outcomes-tied net prices below MFN but keep list intact.	+1-2pp
4	Direct-to-consumer bypass	Mid-term	Stand-up limited DTC distribution (Section 804 import + cash-pay) to preserve margin and test demand outside PBM spread.	+1-2pp
5	Policy and legal defense	Long-term	Coalition litigation (APA, NFIB v. OSHA precedent) + trade-policy lobbying to slow or narrow a mandatory rule.	"buys time"

Five levers to protect innovation under MFN

There is no playbook for such a policy shift: We will learn as we go applying health economics concepts

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