The Trump administration’s most-favored nation drug pricing strategy has been a topic of much discussion and debate since the executive order was issued in May. The aim of the order was to set price targets for prescription drugs based on those of other developed nations, but details were scarce at the time.
Recently, the Centers for Medicare and Medicaid Services (CMS) provided more information on the model. Benchmark prices will be based on the second-lowest among eight comparator countries, including Canada, Denmark, France, Germany, Italy, Japan, Switzerland, and the United Kingdom. CMS also announced a new drug payment model called “GENErating cost Reductions fOr U.S. Medicaid Model” (GENEROUS) that will make most-favored nation prices available to state Medicaid programs through manufacturer rebates.
Under the Affordable Care Act, CMS has the authority to develop innovative payment models to reduce program expenditures while maintaining quality of care. Participating in the GENEROUS model is voluntary for both manufacturers and state Medicaid agencies. States that opt in will have access to most-favored nation level prices for participating manufacturers’ drugs through CMS-negotiated supplemental rebates.
The goal of the model is to reduce Medicaid drug spending and improve patient access to medications. Manufacturers that have already signed most-favored nation deals will participate in the model, with more expected to join. The model also aims to establish uniformity in coverage and utilization management among participating state agencies to improve patient access to treatment options.
While the GENEROUS model will not change Medicaid beneficiaries’ out-of-pocket costs, it raises questions about how CMS will obtain the net prices needed to calculate most-favored nation indices. Additionally, challenges may arise with treatments approved in the U.S. but not in one or more of the comparator nations.
Overall, the most-favored nation drug pricing strategy is a complex and evolving initiative that aims to lower drug prices for Americans while maintaining quality of care. The details provided by CMS shed light on how the model will work, but challenges and questions remain as the program is implemented. When it comes to comparing drug prices across different countries, there are several challenges that can arise. One major issue is the varying approval processes and timelines among different regulatory agencies. Even when products are approved by all the necessary agencies, there can be delays in pricing and reimbursement in certain jurisdictions. This can make it difficult to make accurate price comparisons between countries.
Another point of contention is the discrepancy between the administration’s claims of agreeing to most-favored nation prices on platforms like TrumpRx and the actual prices being offered. For example, when looking at the list prices of a drug like Ozempic in various comparator countries, it is evident that the prices in some countries are significantly lower than what is being offered on TrumpRx. This raises questions about whether the prices being touted as most-favored nation prices are truly competitive on a global scale.
Taking the autoimmune drug Xeljanz as another example, the announced 40% discount on TrumpRx may seem like a good deal for patients. However, a closer look at pricing and reimbursement data from countries like France, Germany, and the U.K. reveals that the prices in these countries are considerably lower than what is being offered on TrumpRx. This calls into question the validity of claiming these prices as most favored nation prices.
In order to accurately assess whether a price is truly competitive on a global scale, it is essential to consider not just list prices but also net prices. Net prices, which are often proprietary and not publicly disclosed, can provide a more accurate representation of the actual cost of a drug in a given country.
Overall, the process of comparing drug prices across different countries is complex and multifaceted. It is important for policymakers and healthcare providers to consider all factors, including approval processes, pricing and reimbursement timelines, and net prices, in order to make informed decisions about drug pricing and access on a global scale.
