Most Favored Nation Drug Pricing Moves Forward, but Experts Warn Details Are Still Missing

As the Trump administration revives its push to shake up drug pricing, industry experts warn that proposed Most Favored Nation (MFN) policies, potential drug tariffs, and the rise of direct-to-consumer (DTC) channels could reshape how medicines are priced and distributed in the US. The MFN executive order seeks to align US drug prices with those in other developed countries, recently advancing through a voluntary agreement with Pfizer.

During an MJH Life Sciences^® webinar, “How Trump Is Disrupting Pharma: Exploring the Impacts of MFN, Tariffs, and DTC on Drug Markets,” panelists discussed the political and economic ripple effects of these policies. The discussion was moderated by Ron Lanton, JD, senior partner at Lanton Law, and featured Lindsay Greenleaf, JD, MBA, head of policy, research, and analysis at ADVI Health; Stacie Dusetzina, PhD, professor of health policy at Vanderbilt University Medical Center; and Neal Masia, PhD, CEO and founder of EntityRisk and former chief economist at Pfizer.

This is the final webinar in the 3-part MJH Life Sciences series. The first webinar, “The Most Favored Nation Mandate: What the President’s Drug Pricing Push Means for Pharma, Payers, and Patients,” examined how the executive order could reshape drug pricing, patient access, and pharmaceutical innovation.¹ The second webinar, “Most Favored Nation Order: Legal Battles, Market Shifts, and the Future of Drug Pricing Reform,” built on that foundation, focusing on the legal, procedural, and market implications of the MFN initiative and how it could influence the broader landscape of US drug pricing reform.²

MFN as Policy or Pressure?

MFN remains a defining feature of the Trump administration’s drug pricing agenda, according to Greenleaf, but its future depends on who occupies the White House after 2028. “MFN as a concept is certainly here to stay,” she said. But whether it becomes structural reform or just a negotiating tactic depends on politics.

Two proposed demonstration models—the GLOBE and GUARD models—are under review at the Office of Management and Budget and could apply international reference pricing to Medicare Part B, Medicare Part D, or Medicaid. Greenleaf noted that if enough manufacturers continue striking voluntary pricing agreements with the administration, GLOBE and GUARD might never be released because MFN pricing could be achieved without them.

Masia agreed that the policy’s influence comes largely from uncertainty. “The monster in the horror movie is always scarier when it’s hidden,” he said, adding that the MFN threat alone is already affecting company behavior and pricing strategy.

Tariffs and Patient Impact

The idea of imposing tariffs on foreign-manufactured drugs could raise patient costs. Dusetzina explained that if tariffs were applied broadly, US consumers would pick up the tab through higher premiums and cost sharing. Still, the threat has successfully drawn companies into negotiations. "It's more of a bargaining chip, rather than necessarily something that we should expect to see applied broadly in the market," Dusetzina said.

DTC Channels Challenge the Supply Chain

The panel also explored the surge in direct-to-consumer drug fulfillment, particularly for high-demand cash-pay products such as glucagon-like peptide-1 weight loss drugs. These programs could expand access and convenience but risk bypassing pharmacists and disrupting continuity of care, Greenleaf noted.

Masia viewed the trend as a strategic response to pharmacy benefit managers (PBMs). "I think it's much more about trying to break the hold that the PBMs have on the gross to net and the rebate strategy, to get them off the treadmill," he explained, noting that if manufacturers can share those savings directly with patients, they could reshape the channel.

However, Dusetzina warned that insurers may respond by limiting coverage due to potential pressure to include certain products under the benefit. "Even for companies that have previously offered coverage, they're rolling back coverage on products with this perception that people can just go and get them under a cash pay model, totally outside of their health insurance plan benefit," she said. "So, I think it is a little bit of a slippery slope."

340B and Medicaid Risks

Because 340B drug discounts are tied to Medicaid rebate calculations, Greenleaf cautioned that linking MFN prices to Medicaid’s “best price” could create “catastrophic" financial spillover for manufacturers. Internal modeling, she noted, estimated a potential $1 trillion industry hit over 10 years if MFN pricing directly resets Medicaid and 340B discounts.

Dusetzina added that the potential for Medicaid savings under MFN is limited. For many drugs, Medicaid might already be paying less than the MFN benchmark. "I feel like it's a stretch to say that it's going to be a significant amount of savings for the [Medicaid] program," she explained.

Proceed With Caution

Each panelist closed with advice for stakeholders. Masia urged companies to clearly communicate drug value to payers and patients. Greenleaf advised investing in policy analytics to keep pace with rapid developments. Dusetzina recommended patience while waiting for the details of MFN, which are particularly important for those involved in health policy. “Take a breath and see what kind of details you actually can find," she said, "because the news is coming really fast these days, and it's very light on detail."

References

1. Shaw M. Unpacking the complexity of the Most Favored Nation Mandate. The American Journal of Managed Care^® (AJMC^®). September 12, 2025. Accessed November 5, 2025. https://www.ajmc.com/view/unpacking-the-complexity-of-the-most-favored-nation-mandate
2. McNulty R. A "one-two punch" to innovation? The Most Favored Nation order and broader US drug pricing reform. AJMC. October 10, 2025. Accessed November 5, 2025. https://www.ajmc.com/view/a-one-two-punch-to-innovation-the-most-favored-nation-order-and-broader-us-drug-pricing-reform