On July 24, President Trumped signed a series of executive order (EOs) focused on reducing Medicare beneficiary and program spending on prescription drugs. One executive order, the details of which were not immediately released, would set prices for drugs in Medicare Part B to no more than the prices paid by a basket of other developed countries, the “most-favored-nation” (MFN) price. Ostensibly this policy would lower prices in the United States, given that the US pays higher prices than these countries. The idea is similar to the “International Price Index” (IPI) proposed rule from 2019, although the EOs came with significantly less detail. The President said that he would wait to release the details of the July 24 MFN and give the pharmaceutical industry an opportunity to negotiate a different arrangement to reduce drug prices. The window for those negotiations closed on August 24.
On Sunday, September 13, the President released a new version of MFN. This MFN also includes linking prices for certain Part D drugs to international prices, in addition to Part B drugs. Both the Part B and D provisions in the latest MFN would operate as a model under CMMI authority. It is unclear whether these would be mandatory or voluntary models. Read NCHC’s full memo on the Executive Order here.