TPA Opposes Most Favored Nation (MFN) Drug Pricing Plan

For Immediate Release             

Contact: Kara Zupkus (224) 456-0257

WASHINGTON, D.C. – Today, the Taxpayers Protection Alliance (TPA) expressed its firm opposition to the Trump administration’s rollout of the Global Benchmark for Efficient Drug Pricing (GLOBE) and Guarding U.S. Medicine Against Rising Drug Costs (GUARD) models that represent a renewed push to implement Most Favored Nation (MFN) price controls on pharmaceuticals. This misguided approach would tie U.S. drug prices to prices set by foreign countries with socialized healthcare systems. The Center for Medicare and Medicaid Innovation (CMMI) has played a key role in developing these price control models, despite CMMI failing to reduce healthcare budgets and costing taxpayers more than $5 billion on net between 2011 and 2020.

In response to this development, Ross Marchand, Senior Fellow at TPA, offered the following comment:

“Thanks to strong legal protections and price flexibility, drug innovation has flourished in the U.S. MFN price controls threaten to destroy this unrivaled success. Bringing a medication to market certainly isn’t easy. Development and regulatory costs typically require billions of dollars and roughly a decade of time. Foisting below-market prices on medications will make it far more difficult for innovators to get lifesaving drugs on the shelves. As America struggles to cope with healthcare affordability and availability, it has never been more important to keep the development and innovation pipeline open.

“President Trump’s plan would have the federal government adopt the failed policies of European countries in divining prices for key medications. Europe’s 50-year experiment with price-fixing has led to a mass exodus of leading drug manufacturers from the continent. Since the 1970s, the share of new medications originating in countries such as Germany, France, and the U.K. has been cut in half as companies have sought refuge in the U.S. and European consumers have paid the price in the form of chronic shortages of lifesaving medications such as statins. Australia has a similar price-fixing regime and has experienced crippling medication shortages. The U.S. cannot afford to repeat these mistakes here.

“Americans have benefited from an innovative healthcare system that continues to quickly deliver lifesaving medications to consumers. Shackling this system to price controls is most certainly not what the doctor ordered.