“After years of threatening to blow up America’s world-leading biomedical ecosystem, Trump announced an executive order in September that would do just that”—a.k.a. the Most Favored Nation (MFN) drug reimbursement scheme, says Rich Masters, BIO’s EVP of Public Affairs, on the newest episode of the I AM BIO Podcast. He’s joined by two guests who explain what happened—and why the scheme would harm innovation and patients.
“Most Favored Nation” sounds friendly,but it’s really just foreign price controls—“which study after study after study shows will result in far-fewer new medicines being developed,” says Rich.
The executive order, “hastily issued in September before an election with no opportunity for public comment, would only save insurance companies billions at the expense of cures for patients,” he continues. “Worse yet, this was all occurring as our scientists were working around the clock and risking billions of dollars to find cures and vaccines for a global pandemic.”
(Feeling a little lost? Read our recent Most-Favored Nation explainer.)
BIO, BIOCOM California, and the California Life Sciences Association (CLSA)took the administration to court—and got an injunction and blocked the order, at least for now.
The MFN scheme was based on a “misconception about how drugs are priced,” explains John Murphy, Deputy General Counsel of BIO, who litigated the case. And biotech investors are not willing to risk billions “if they don’t have some reasonable assurance that the drug can be accessed and paid for once it finally comes to market—if it comes to market.”
And MFN “relies on the rationing of breakthrough treatments” and “creates conditions akin to drug shortages,” adds Sue Peschin, President and CEO of the Alliance for Aging Research.
For example: Americans have access to 96% of oncology therapies within two months following approval, she said. Compare that to some of the countries referenced, such as the UK (which has access to 71% in one year), France (68% in 16 months), and New Zealand (29% in two years).
There’s a lot packed into the 28-minute episode—including what the Biden administration might do on drug pricing, the importance of IP, and how we can fix patients’ out-of-pocket costs without destroying the innovation advantage.
Get the episode at www.bio.org/podcast or wherever you get your podcast fix, including Apple, Google, or Spotify.
Want to know more about MFN and how we got here? Read our recent explainer.