Policy Update: Drug Pricing - Trump Administration Announces Most-Favored Nation Drug Pricing Model - McDermott Will & Emery


Drug prices have emerged as an important US political issue in recent years, with roughly 140 bills on drug prices introduced in the US Congress since January 2019. On November 20, 2020, the US Department of Health and Human Services (HHS) announced an interim final rule with comment that will introduce sweeping changes to the way many drugs are reimbursed by Medicare Part B in the United States by adopting a system of external reference pricing (ERP) using a “most-favored nation” (MFN) pricing approach. With a change in administration on January 20, 2021, and potential legal challenges on the horizon, it is uncertain whether this rule will be implemented as published. There is bipartisan interest in drug pricing legislation with an ERP approach having support across the political aisle. This suggests that even if the MFN interim final rule is not implemented as published, an ERP approach may likely be a part of future policymaking on ratesetting for drugs under Medicare.