Most Favored Nation, Least Favored Patients

President Trump's May 12th executive order establishing Most Favored Nation (MFN) pricing for prescription drugs promises dramatic savings. Still, it threatens to dismantle America's position as the global leader in medical innovation while importing discriminatory healthcare rationing through the back door. While the Administration claims the policy could generate $85.5 billion in Medicare savings over seven years, the evidence reveals a devil's bargain that risks sacrificing immediate access to life-saving and life-improving medications and the medical breakthroughs that keep America first in line for life-saving treatments.

Congress just allocated $75 billion in extra funding for ICE to detain and deport brown people while simultaneously implementing policies that could paralyze medical research. It seems Washington has unlimited money to remove people from the country, but life-saving drug innovation must be rationed through foreign price controls. This isn't limited to Republicans—Democrats tried similar price controls in 2019.

The executive order directs the U.S. Department of Health and Human Services to implement pricing tied to "the lowest price in an OECD country with a GDP per capita of at least 60 percent of the U.S. GDP per capita." Unlike Trump's blocked 2020 attempt, this version establishes a two-phase approach: voluntary compliance within 30 days, followed by escalating enforcement, including regulatory rulemaking, drug importation authorization, and even potential FDA approval revocations. So far, not much has been disclosed by the Administration or manufacturers as to how that process is going.

To casual observers, this may sound appealing on its surface. Americans do pay more for prescription drugs than patients in other developed countries in terms of gross costs. But MFN pricing operates as a Trojan horse that would fundamentally reshape American pharmaceutical markets while potentially circumventing federal prohibitions on quality-adjusted life year (QALY) metrics that systematically discriminate against vulnerable populations. Additionally, U.S. investments in pharmaceutical innovation help fund global access to medications in underserved countries—a moral leadership role we abandon when we adopt foreign rationing schemes.

The QALY Trap: How International Pricing Imports Discrimination

Countries used as MFN benchmarks systematically employ Quality-Adjusted Life Year (QALY) and similar assessments to determine drug coverage and pricing, creating an indirect pathway for importing these controversial metrics into U.S. healthcare despite explicit federal prohibitions. QALYs attempt to measure treatment value by calculating both quantity and quality of life gained, but they assign numerical scores to different health states—effectively putting a price tag on human life based on perceived disability or illness.

Consider two people needing treatment: Person A without a chronic condition and Person B living with cystic fibrosis. Under QALY calculations, because Person B may not achieve the same "quality" of life after treatment as Person A, treatment for Person B is automatically deemed "less valuable" than treatment for Person A—especially for therapies targeting chronic conditions. All under the frame of "cost-effectiveness."

The United Kingdom's National Institute for Health and Care Excellence (NICE) employs "cost-effectiveness" thresholds of £20,000-30,000 per QALY gained, meaning treatments costing more than roughly $25,000-$37,000 per "quality-adjusted" year of life are typically rejected. Canada's Agency for Drugs and Technologies in Health (CADTH) reduced its threshold to CAD$50,000 per QALY in late 2020. Australia's Pharmaceutical Benefits Advisory Committee (PBAC) routinely rejects drugs exceeding AUD$76,000 per QALY. When MFN pricing imports these countries' low drug prices, it inherently imports the discriminatory QALY calculations that produced them.

The discrimination is measurable. Between 2014-2018, zero rare disease treatments reviewed by the Institute for Clinical and Economic Review (ICER) received "high value" ratings under standard QALY thresholds. Canada required price reductions exceeding 70 percent for 71 percent of orphan drug approvals to meet "cost-effectiveness" standards. The United Kingdom systematically rejected multiple cancer drugs based purely on QALY calculations, prompting the creation of the Cancer Drugs Fund specifically to bypass NICE's thresholds.

A 2022 National Institute of Allergy and Infectious Disease-funded, ICER "cost-effectiveness" review explicitly utilizing QALYs concluded that breakthrough long-acting injectable HIV prevention "limits the additional price society should be willing to pay" because of pre-existing oral regimens. The value of increased adherence and reduced HIV transmissions, under this conclusion, was simply not worth the cost to "society."

As the Disability Rights Education & Defense Fund explains, "The QALY equation relies on a baseline of 'perfect health' that is calculated by society's conception of health and functioning." People with disabilities are automatically assigned lower quality-of-life scores, regardless of their lived experiences. The breakthrough cystic fibrosis treatment Trikafta, which significantly extends lives, is undervalued by QALY calculations because cystic fibrosis involves the functional “limitation” of “only” ensuring patients with cystic fibrosis will remain out of the hospital, not return to full lung function.

Current U.S. law explicitly prohibits federal programs from using QALYs in coverage decisions. The Affordable Care Act forbids Medicare from using QALYs or "similar measures that discount the value of a life because of a person's disability." Yet MFN pricing effectively endorses discriminatory "cost-effectiveness" standards because importing prices from countries like the United Kingdom and Canada inherently imports the QALY-based decisions that generated those prices.

These metrics harm access today, not just in the future. Trikafta was selected by Colorado's Prescription Drug Affordability Board (PDAB) for "affordability review" last year. Only after more than a year of patient advocacy, industry data input, and provider testimony about the medication's effectiveness did the Board deem the drug "not-unaffordable"—despite not defining what “affordability” means or for whom. If the Board had determined the medication “unaffordable,” it could have then imposed a reimbursement cap – essentially reducing what plans, not patients, would pay for it and harming the financial stability of actors up and down the supply chain. Patients rightfully shared concerns about losing access under what amounts to political appointees saying, "your medication isn't worth paying for."

Back in Colorado, Trikafta patient Amanda Boone testified to the Board about her fear of losing the ability to be a mom to her child, returning to ongoing hospital stays, and the physical and mental health costs of living with cystic fibrosis before the life-altering medication. She was firey, brought to tears, and ultimately silenced by the Board for her honesty. Today, the Board is still considering data about medications driven by similar backdoor QALY insertions and by ICER’s Harvard equivalent, PORTAL – all funded by the state of Colorado.

QALYs and the mechanism of importing them, by way of MFN, aren’t just a future threat. They’re a threat on access to medications that exist today.

Human life is not a value equation that can be calculated by an analyst, actuary, or worse, a politician. In a time when populist rhetoric increasingly dehumanizes people across gender, race, and sexual identity, we cannot allow healthcare policy to embed systematic discrimination against people with disabilities, chronic conditions, or terminal illnesses. The intersections of humanity most burdened by diseases like HIV and hepatitis C deserve better than rationing schemes disguised as cost savings.

Innovation Exodus: The Cost of Being Second

MFN pricing threatens America's position as the global innovation leader in ways that extend far beyond budget calculations. National Bureau of Economic Research analysis demonstrates that cutting drug prices by 40-50% leads to 30-60% fewer R&D projects in early-stage development. With only three out of 10 pharmaceutical products generating returns exceeding average R&D costs of $802 million, aggressive pricing pressures could eliminate the margins that make drug development viable.

The historical precedent is sobering. European R&D investment exceeded U.S. levels by 24 percent in 1986, but after implementing price controls, European R&D fell to 15 percent below U.S. investment by 2004. By 2020, 47 percent of global new treatments originated from the United States versus 22 percent from Europe—a complete reversal from 25 years earlier.

The damage is already starting. Venture capital investment dropped from $36.7 billion in 2022 to $29.9 billion in 2023, and 166 of 785 U.S. venture-backed companies with drugs in development have not raised capital since 2021. Companies like Alnylam have already halted Phase 3 trials for Stargardt disease, explicitly citing pricing policy pressures as the reason.

What happens when the next breakthrough HIV cure emerges from Chinese research facilities while American companies struggle under price controls? What happens when Europeans develop the next generation of mRNA vaccines while U.S. biotech funding dries up?

Here's the reality: Europe won't catch up. Neither will China. No other country is prepared to step into the innovation gap the United States represents. There's no telling if or when any other country might be willing to make the types of investments we do today. Cutting off the funding source won't magically drive down today's costs—it will simply lead to fewer cures, more deaths, and more illnesses tomorrow. Fewer cancer cures, fewer investments in curing Alzheimer's, a world where we're further from our health goals, not closer.

We maintain the most critical advantage in the world: developing the most effective, safest medicines and being first in line for medical breakthroughs. MFN pricing gambles away that advantage for questionable savings.

Real Solutions: Fixing the Actual Problems

If President Trump genuinely wants to lower prices for consumers, he should target the obvious culprits driving up costs through market manipulation rather than importing foreign price controls and the threats to patients that come with them. Ohio demonstrated the path forward by eliminating CVS Caremark and OptumRx from Medicaid and creating a single state pharmacy benefit manager with pass-through pricing. The result: $140 million in savings over two years while actually paying pharmacies more. Kentucky achieved $282.7 million in savings between 2021-2022 through its single PBM model.

The scope of pharmacy benefit manager abuse is staggering. Federal Trade Commission findings reveal that PBMs generated $7.3 billion in excess revenue from specialty drug markups between 2017-2022, marking up some generic cancer drugs by almost 250 times acquisition cost. Major PBM formularies excluded 1,156 unique prescription medicines in 2022—a 961 percent increase since 2014—affecting an estimated 275,000 patients who required medication switches.

Real reform means addressing PBM spread pricing that allows middlemen to pocket the difference between what they pay pharmacies and charge insurers. It means demanding transparency from hospital systems that have consolidated into monopolies driving up costs while reducing services. It means eliminating 340B abuse where hospitals generate billions in profits while patients see no benefit. And it means holding insurance company executives accountable with real consequences when they systematically deny legitimate claims.

These solutions exist and work. Ohio saved $140 million. Kentucky saved $283 million. West Virginia cut insurance rate increases in half. None required importing discriminatory rationing schemes.

Choose Progress, Not Populism

MFN pricing offers a false choice between astronomical drug costs and innovation collapse, when the real choice is between gutting American medical leadership or fixing the broken systems that actually drive up costs. We can pursue aggressive reforms without sacrificing our position as the country where breakthrough treatments emerge first.

With 30 million Americans living with rare diseases depending on continued innovation and 95 percent of approximately 7,000 rare diseases still lacking treatments, we cannot afford policies that prioritize short-term budget savings over long-term survival. America's healthcare system needs reform, but MFN pricing represents a dangerous gamble that could leave us second in line when the next cancer breakthrough or HIV cure emerges. That's a risk no American should have to take.