Op-ed: Most Favored Nation Has No Place in U.S. Healthcare
By John Czwartacki, Founder and Chairman of Survivors for Solutions
As a patient living with a chronic illness, there is nothing more discouraging than efforts that stunt medical innovation. This includes policies that knowingly shackle ourselves to backward ideas. President Trump’s recent executive order to improve American health wrongheadedly proposed to implement “most favored nation” (MFN) that would embrace ideas that our innovative environment left behind. For patients awaiting access to miracle medicines that America has become known for, this EO, along with Congress's MFN proposal in Medicaid, was disheartening.
MFN would inexplicably link our medicine to failing foreign countries. This artificial price fixing will force manufacturers to pull back investment in research and development as they face uncertainty about new product discoveries. Ignoring the public subsidies and excessive regulation that hide actual costs, this policy also completely disregards the lower prices we pay for generic medicines that are 90% of the drugs prescribed in this country. As a patient with chronic disease, an advocate for those awaiting life-changing developments, and a public policy veteran of the first Trump administration, I know that this is a bad tangent to go down. I can confidently say that this policy harms patients, misreads what made the United States the global leader in medical discovery, and is the least “America First” idea imaginable.
President Trump made progress for our country throughout his first months of his second term in office, including for Americans' health. Importantly, he and the MAHA team have sought to tackle chronic disease and support the intellectual property rights that drive innovation, while exploring ways to lower costs for everyone. Unfortunately—and objectively—MFN works against these goals. MFN policies are inherently anti-free market, as they manipulate drug prices by pegging them to other countries. Current applications ignore the greatest contributor to reducing prices—competition, generics, and biosimilars—the negative impacts of such government price setting would result in a destructive wave across our entire innovation landscape.
Moreover, many of these countries impose prices that are determined using discriminatory valuation tools. These pricing mechanisms, like the quality-adjusted life year (QALY), devalue and de-prioritize care for the sickest patients. They keep prices lower by just selling to patients deemed more valuable. As someone who is suffering from a chronic disease, and has been blessed to live in a place where innovation is incentivized, I have had a steady pipeline of weapons to battle my multiple sclerosis (MS). Until now.
I have zero doubt that these and many other treatments would have never been developed in an MFN universe. Why President Trump would mimic these systems is baffling. How does reducing cures make Americans healthier ever again?
Don’t forget, there is a reason America is a destination for healthcare tourism from the very countries that we are being told to emulate and envy. The fact is European patients have access to fewer new drugs and experience longer wait times than we do at home. Why would we chain ourselves to a failed eurozone model where their patients come to America for care when they most need it? Where can we go when these kinds of policies cause America to lose our innovative edge?
Sure, the American medical research ecosystem is the best in the world, but there are improvements that could be made. For example, Congress could enact legislation to curb the power of drug middlemen, who use anticompetitive practices that drive up patient costs. These industry giants steer patients toward medications with higher out-of-pocket price tags and ignore lower-priced generic options. They also delay or prevent patients from accessing their treatments with ever-increasing premium increases driving up out-of-pocket expenses.
Besides the obvious flaws in MFN, Congress already has its work cut out for it in fixing the Inflation Reduction Act (IRA). The 2022 law implemented a “negotiation” program that hired an entirely new government bureaucracy to fix Medicare drug prices. As expected with any case of price-fixing, the program has caused shortages and a tangible pullback in the creation of new treatments. Over 50 research programs have been abandoned since the law was passed, and the program particularly threatens treatments for life-threatening illnesses like cancer.
I was able to voice these concerns at feedback roundtables with the agency administering the program earlier this year, but this program must be altered—or halted altogether. In the meantime, some of its flaws could be addressed with legislation. Congress must, at least, pass the Ensuring Pathways to Innovative Cures (EPIC) Act to fix a disparity within the price-fixing policies and align the incentives for innovation between different types of treatments.
Needless to say, the United States government has numerous tools at its disposal to address problems within U.S. healthcare. The one tool the Administration and Congress should not use is MFN. Rather, we should look at what works, is consistent with America’s values, and allows us to lead the world in pharmaceutical innovation. Importing failed ideas from abroad and mimicking countries that lag behind will only hurt leadership in health innovation, and with it, the most vulnerable patients in need who need the resulting discoveries. If you want America to be healthy, MFN should be D.O.A.