Decoding Most Favored Nation: Expert Insights on the Impacts to Patients, Pharma, and Innovation

A panel consisting of 4 experts discussed the current administration's Most Favored Nation (MFN) mandate for drug pricing, highlighting its potential impact on drug prices, patient access, and pharmaceutical innovation. The session, which was moderated by Ned Milenkovich, PharmD, JD, included perspectives from:

• Brian Corvino, principal and global market access practice leaders, has expertise in life sciences commercial and market access strategy, including sustainable affordability and launch planning across traditional, specialty, oncology, cell and gene therapy, and rare disease treatments.
• Neal Masia, PhD, cofounder and CEO of EntityRisk, Inc., founder of Health Capital Group, LLC, and an adjunct profession of management and economics at Columbia University, also works in health economics, strategic business development, and market access, following nearly 2 decades in senior leadership roles at Pfizer.
• Ali Pashazadeh, found, chairman, and CEO at Treehill Partners, has more than 2 decades of experience as a health care investment banker at Goldman Sachs, UBS, and Blackstone, as a biotech CEO and trained trauma and reconstructive surgeon still practicing in acute care.
• George Van Antwerp, MBA, senior vice president of product innovation and strategic planning at Prime Therapeutics, oversees a team in the development, launching, and management of pharmacy offerings. He formerly worked at Deloitte and led the health care practice with a focus on pharmacy.
• Ned Milenkovich, PharmD, JD, is an attorney and registered pharmacist who chairs the health care law practice at Much Shelist, PC. He is the former vice chairman of the Illinois State Board of Pharmacy, and is a long-time thought leader, serving on the Pharmacy Times editorial advisory board and regularly speaking at industry events.

Corvino noted the historical context and recent executive orders. Masia emphasized the policy's ambiguity and potential to disrupt global markets. Pashazadeh warned of reduced innovation and quality of care. Van Antwerp stressed the need for transparency and new supply chain models. Despite the range of topics covered, the panel unanimously agreed on the complexity of implementing MFN and its potential to disrupt the current system, with varying impacts on different stakeholders, including patients, pharmacies, and pharmaceutical companies, and other health care professionals.

This recap has been edited for clarity and conciseness. The webcast in its entirety can be viewed here.

Ned Milenkovich, PharmD, JD: What are your initial thoughts on the administration’s MFN play?

Brian Corvino: Interestingly enough, I was just speaking with some of my trade policy colleagues about this, and they reminded me that the concept of “most favored nation” has a long history in US trade policy. That said, when it comes specifically to drug pricing, the issue has really become active over the past year. To give you a brief history: this past May, 2 executive orders reintroduced the MFN concept in drug pricing. The first order provided some direction on MFN and brought in the idea of direct-to-consumer provisions, while the second focused on brand drugs and comparable markets.

Then, at the end of July, there was a call to action for 17 biopharma CEOs—US and international—reiterating MFN and outlining several initiatives. These included potential MFN use in Medicaid, applying MFN to new product launches across commercial and government channels, and actions on US versus ex-US pricing, as well as direct-to-consumer and direct-to-business approaches. By late September, the conversation had broadened further. I feel strongly that this needs to be viewed holistically, especially since the administration is clearly laying groundwork for substantial drug pricing changes. These connect to the Inflation Reduction Act—things like inflation guidance, Medicare negotiation, 340B transparency, ASP calculations—and even extend into tax, trade, tariffs, and state-level actions. So that’s a bit of a briefing, and I’m happy to keep the dialogue going.

Neal Masia, PhD: You know, it’s tough to even start by defining this policy, because no one really knows exactly what it is. It’s not entirely new—Europe has had reference pricing rules for decades with fairly predictable effects—but here, it feels different. As an economist, I’m cursed to try and apply logic and facts to something that’s really less about policy mechanics and more about leverage. I think what the administration is doing is asking itself, “What’s the most aggressive thing we can do within our authority to push the industry to the table?”

The details of MFN may be largely unworkable, and I’d argue it’s not a smart way to achieve the stated goal. But the underlying goal is clear: show progress on lowering drug prices. The industry knows this, even if it doesn’t know exactly how to make it happen—it’s a very complicated problem. In the short term, MFN works in a “vibe” sense: it pressures companies to think more seriously about direct-to-consumer models and to find ways of aligning prices with value. But it also has real downsides. CEOs I speak with every day have essentially written off Europe for now, telling investors they’re focused on the US until the uncertainty settles. That shift has big implications, and frankly, it makes me doubt this policy has much chance of real success.

Ali Pashazadeh: As the team has said, this is something we’ve been talking about for a long time—certainly over the past 10 months, but really for 15 years or more. We’ve already lived through MFN in Europe. Back in 2007, Switzerland was a hub for biotech with multiple IPOs; now that market is essentially gone. We’ve also seen the UK experience a brain drain, with scientists moving elsewhere for better salaries and pricing opportunities. So there is clear precedent for the impact of these kinds of policies.

I fully understand the logic behind MFN—the desire to get drugs to patients at prices comparable to other countries makes sense. But the real questions are how it’s implemented and when. Right now, we haven’t had an IPO market for five years, venture capitalists are holding assets far longer than they used to, biotech funding is at an all-time low, and large pharma relies heavily on biotech for its pipeline. Layer on top of that the push to bring manufacturing back onshore to the US, uncertainty around FDA transitions, and now MFN—it feels like the perfect storm. From an investor’s perspective, there are just too many unknowns to confidently price or back a product, even when the science looks promising. That level of uncertainty is exactly what worries both CEOs and investors right now.

George Van Antwerp, MBA: From the PBM and payer perspective, we all recognize that drug prices remain too high. Right now, about a third of the public is skipping doses or cutting back because they simply can’t afford their medications. So we applaud the administration’s efforts to make drugs more affordable, keep patients on therapy, and reduce out-of-pocket costs.

That said, as others have mentioned, there are still a lot of unknowns about how this will actually play out. Part of the conversation also ties into tariffs and the push to onshore more development over the next several years, which will take time. And in the meantime, there’s a reality of cross-subsidization—the US pays nearly three times what other countries pay, effectively keeping prices lower abroad. So we’re supportive and curious to see how this evolves, with the hope that it ultimately delivers real results for patients through lower costs at the counter.

Milenkovich: Who are the potential winners and losers here? We don’t know everything on how this is going to play out, but who stands to gain and who stands to lose out from this approach to drug pricing?

Van Antwerp: I think it’s always tough to point to clear winners and losers here. The hope, of course, is that the winner is the American public—the consumer—by ensuring continued access to innovation, whether that’s drugs for chronic conditions, rare diseases, or other areas, while also pushing prices down and lowering the total cost of care. For this to really work, though, it has to drive transparency and help not just the insured, but also the uninsured and underinsured, which I know is part of what the administration is aiming for with its direct-to-consumer efforts.

At the same time, we have to be careful not to add even more complexity to an already overly complex pricing and supply chain system. Between MFN, tariffs, the IRA, and other changes, it’s easy for things to become harder rather than easier. So, ideally, the consumer comes out ahead—and the challenge for all of us is to embrace new models creatively while keeping the focus on making the system simpler and more affordable.

Pashazadeh: I’ll put my medical hat on for this one. The only person I care about here is the patient—everyone else is really just part of the discussion. Having trained 30 years ago and lived through MFN in Europe, I’ve seen how the system tends to optimize for the majority. The problem is, when you’re focused on cost effectiveness for 95% of patients, the 2% to 3% on either side get left behind. And that matters a lot if you or your loved one happens to fall into that group. I’ve been in hospitals where a patient clearly needed a treatment, but it was denied because it wasn’t deemed cost effective, even though it was exactly what they needed for their cancer or heart condition.

So who wins or loses here really depends on implementation. If you think about it like space exploration, no one would have predicted that SpaceX could launch rockets at a fraction of NASA’s cost. This could be the same type of challenge—there may be ways to innovate that aren’t obvious yet. But at the end of the day, we need legislators, lawyers, and policymakers to remember that this isn’t just about frameworks and negotiations. It’s about real people—someone’s parent, someone’s child—who will ultimately pay the price if we get it wrong.

Masia: I’d probably take a more practical view on winners and losers under MFN. First off, I don’t really know how this would be implemented, and that matters a lot. If the goal is just to announce lower list prices, most patients won’t even notice—those changes don’t directly affect what they pay at the counter unless deeper reforms happen underneath.

From an investor perspective, I’d be worried about the drug companies, since they’d likely sacrifice their European markets to protect the US, which drives the majority of their profits. But honestly, I’d be more concerned about PBMs, hospitals, and doctors. Their business models—whether it’s spreads from 340B, ASP-plus pricing, or discounts—could all be disrupted if companies shift to direct-to-consumer models or rework list prices. Longer term, there’s also the question of innovation. If returns on R&D go down, that eventually hits the pipeline, and we’re already seeing tightening of budgets, especially with the IRA’s impact.

And then there’s Europe. I’ve already seen companies walk away from European strategies entirely, at least for now, or license those assets out rather than launch there. So it’s not just the drug industry that’s affected—there are real ripple effects for PBMs, hospitals, and doctors too. I don’t think the impact on them is well appreciated yet, but I can’t see how it turns out well.

Milenkovich: How will pharma respond, and how do we see their response playing out?

Masia: I think the first and most immediate response we’ll see is acceleration of the direct-to-consumer model. You’re already seeing that with Lilly’s success on tirzepatide (Zepbound), and I’d be surprised if, 5 or 10 years from now, we don’t see much more direct selling to consumers. That’s going to force the traditional intermediary discount model to catch up or risk becoming irrelevant. If I were at a drug company, I’d be asking, “Who’s accelerating our direct-to-consumer strategy, and how fast can we move?”

The second piece is research and development (R&D) strategy. Companies are now really having to assess which therapeutic areas are US-dependent versus global. For global ones, investment decisions are getting tougher, and I’ve seen those conversations play out firsthand. And then the third response is around value—companies need to do a better job of explaining what the value of a drug really is. That’s tricky, because there’s no single agreed-upon value framework, CMS has restrictions, and there are countless models floating around. But I can tell you, demand is growing for serious work in this area—both academically and within companies—as they try to match price with value in this uncertain environment.

Corvino: I can’t really speak to the legal aspects, but I can certainly talk about strategy. The way companies respond really depends on who they are. A large-cap multinational biopharma is going to approach this very differently than a small biotech launching first in the US and deciding whether or not to enter Europe. There are also differences depending on whether a company is US-based or international, how much of its revenue comes from domestic versus global markets, and of course, the mix of therapies in its portfolio. High-cost, low-volume treatments like oncology and rare diseases look very different from vaccines or broad-market therapies.

Right now, most leadership teams are operating in a bit of a purgatory. Some argue you have to act now and prepare as if the policies being outlined will move forward. Others are taking a wait-and-see approach, mapping out scenarios and contingencies rather than committing too early. And underneath all of this is a bigger strategic question around portfolio composition. Much of the innovation we’ve seen—outside of obesity—has been in oncology and rare diseases, which are incredibly cost-dense. Companies are now asking whether they need to rebalance toward larger patient populations, or even revisit cash-pay models in areas where that might work. These are the kinds of strategic conversations happening right now, and they’ll shape how companies position themselves over time.

Pashazadeh: I think if we look at large-cap pharma, these companies are like tankers—big, slow-moving organizations with very limited ability to pivot quickly. Over the past 20 years, when faced with change, they’ve typically either waited it out or withdrawn altogether. A good example is about 15 years ago, when France dropped its prices and companies like AstraZeneca and GSK simply pulled out of the market.

So in this case, with the rules not yet finalized and the timelines stretching five to ten years, I think large pharma will either do nothing for now or decide to step back. That could mean pulling products, scaling back sales forces, or choosing not to launch in certain markets. In other words, a “France approach;” if they can’t make it work under the new rules, they’ll just walk away.

Van Antwerp: Yeah, I think you’ll see a couple of things. We’ve already seen, like in the last Trump administration, that industry will file multiple legal challenges, and I expect the same playbook here. In a perfect world, companies would just lower list prices and avoid the complexity, showing the administration they’re being flexible. But alongside that, we’re going to hear the usual threats—pulling products, cutting back on R&D, or warning that innovation will slow down.

The reality, though, is that 80% of profits come from the US, so most companies simply can’t afford to walk away from this market. Long term, innovation doesn’t require unchecked pricing power, so they’ll adapt. I think we’ll see more creative solutions to lower list prices, continued pressure from DTC, and broader reforms to the supply chain. The rebate model as it exists today is under pressure, and we’re likely to see entirely new models emerge. The industry will have to embrace those changes and figure out how to operate within them.

Milenkovich: The US has long prided itself on being the leader in biopharma innovation and being first-to-launch. Does MFN and other pricing policies pursued by the administration put that in jeopardy?

Pashazadeh: Yeah, I think it’s important to remember that pricing is really just the visible outcome of deeper structural issues in R&D. What we’ve been focused on at Tree Hill for the last decade is understanding why the drug development success rate is so abysmal. We analyzed 1200 companies, and only 5% actually had clarity on what they were selling, to whom, and at what price. Half of phase 3 programs had a 1-year delay in data capture, and half of those had material errors. In our estimation, about 70% of drug failures are preventable, which is shocking when you think about the cost and timelines involved.

So if you look at it from a funnel perspective, you can either try to force down price or shrink your footprint to maintain margins, or you can fix the underlying inefficiencies in development. Right now only 5% to 10% of phase 1 assets ever make it to market. If you could move that number to 20% to 50%, you wouldn’t need to develop 100 drugs just to get 2 approved, and then recoup costs on the 98 that failed. By improving execution—better trial design, better data integrity, fewer preventable failures—you naturally lower the cost of innovation. And that gives you a pathway to lower prices without being compelled to do so by regulation.

Masia: Yeah, I think it’s worth pushing back on the idea of “unchecked pricing power,” because if it were truly unchecked, PBMs wouldn’t even exist. Their entire business is to act as a counterweight, and they’re pretty effective at it—hence the enormous spread between list and net prices. That’s also why the system is so frustrating and confusing for everyone, policymakers included, because the actual price of a drug is opaque even to people inside the industry. So I wouldn’t say pricing is unchecked; in most segments, it’s heavily negotiated, and companies invest enormous effort into getting it right.

The reality is, if you overprice a drug today, it fails. I’ve been involved in launches that flopped for exactly that reason—the market didn’t bite, and the product just collapsed. So price is an existential risk after all the R&D investment. That’s why so much energy goes into calibrating what the market will actually support. If you look at MFN in that context, it’s less about immediate impact on the US and more about ripple effects globally. We’ve already seen in Europe that when a country’s prices become reference points for others, companies sometimes withhold launches altogether to avoid the bleed-through. In the US, the bigger effect would be portfolio strategy: prioritizing areas where value is clearest and the case for innovation is strong, while pulling back from riskier or less globally supportable categories. That doesn’t mean R&D disappears, but it likely shifts complexion and scale, as Brian noted.

Corvino: I think Neil raised some really strong points, and maybe I’d add a broader perspective. Even if we assume MFN or similar drug pricing policies are in place, the industry is already grappling with some big headwinds. First, there’s a very tight correlation between sales and R&D investment, and over the past 5 years, we’ve seen launch productivity cut in half. Post-COVID, first-year sales are down by about 50%, and that trend has stuck. So not only is launching harder, but when launches fail, half the time it’s because of market access barriers. At the same time, R&D returns continue to decline year over year.

So the policy piece just adds another layer of complexity to challenges that already exist. And it forces some tough capital allocation questions. If you’re deciding where to put your resources, are Medicare- and Medicaid-heavy populations less attractive than commercial ones? Are insured populations less preferable than cash-pay or lifestyle markets where pricing dynamics look different? That calculus flows directly into portfolio choices. Even though R&D is a long-term bet, companies can’t ignore today’s performance, because current sales are what ultimately fund tomorrow’s innovation.

Milenkovich: How will this impact market access, from formulary design to rebate strategies to PBM contracts?

Van Antwerp: PBMs do a pretty good job acting as a brake on pharma pricing today, but the real challenge is how we keep driving innovation while managing costs. MFN could become another lever in that toolbox, but it will reshape the whole US payment system. That raises big questions about rebate reform, point-of-sale rebates, and whether we move toward more targeted incentive models or wider adoption of ICER/NICE-style value assessments that tie price to very specific clinical benefit. If we push toward tighter, evidence-based value frameworks, you’ll likely see fewer drugs per therapeutic category and much more focus on narrow, high-value use cases.

At the same time, the rise of DTC is creating messy operational and clinical issues — cash purchases that bypass claims systems can break clinical edits, ignore deductibles, and fragment patient care. So one clear response will be new models that integrate DTC into the benefit design (so cash payments feed into deductibles and clinical checks) and rethink how rebates and PBM–pharma collaboration work. I actually expect to see renewed, more strategic partnerships between pharma and PBMs—especially around precision medicine—and new payment architectures that try to balance value, access, and patient safety.

Masia: I see disruption ahead whether or not MFN actually goes into effect. I don’t think the administration wants to undermine innovation or cut into R&D, but they do want drug costs to feel more manageable for patients. MFN may end up being more of a bargaining chip to bring industry to the table than the final solution. The real answer could look more like an evolved DTC model—one that addresses the clinical and benefit design issues George mentioned, and maybe even resembles what someone like Mark Cuban might build: simpler, consumer-friendly, but still safe and integrated into the system.

That kind of innovation will take some policy support and fresh investment, but it could emerge quickly if MFN is viewed as the “stick.” Pairing that with a stronger domestic supply chain is also key, since the administration clearly wants more manufacturing and distribution anchored in the US. So if pharma can tighten up supply while modernizing how patients actually access drugs, you could end up with a system that looks safer, simpler, and more sustainable—and MFN is just the pressure point that accelerates those changes.

Milenkovich: Pharmacists and health care professionals are wondering about the downstream impacts on their patients and the therapies they require. The administration bills this effort as a way to lower drug prices for patients. Is that actually going to happen, and is most-favored nation the best way to do that?

Pashazadeh: If you look at the UK, there’s a clear precedent for what happens when you optimize purely for access. Take something simple like urinary tract infections: the system wants antibiotics cheap and widely available, but the default becomes amoxicillin, which has only about 10% sensitivity. Patients walk away, come back two weeks later, and sometimes end up in the ICU. So you do get “access,” but you get it at the expense of quality. And when NICE evaluates treatments, it’s always about the 95th percentile; “good enough” for the majority, but not necessarily cutting edge or tailored for the patient in front of you. That might mean denying someone an extra 6 months of life because it doesn’t clear the cost-effectiveness bar.

From the physician’s perspective, that’s incredibly frustrating. The decision makers aren’t the ones sitting with the patient and explaining, “This isn’t worth it for you.” For some families, that extra time is priceless, even if the system doesn’t agree. And when you look at the launch side of things in Europe, the uncertainty compounds it—companies don’t know pricing until after launch, so they often delay sales force investment or even pull out. So, while accessibility is important and absolutely the right goal, if you implement it the wrong way you risk creating a system where everyone technically gets access, but mostly to outdated or suboptimal care. That’s the precedent to avoid.

Milenkovich: We’ve covered a good deal of ground tonight on this topic. Going forward, as our health care audiences keep a close eye on developments with the administration’s drug pricing efforts, what should they keep an eye on?

Corvino: First, we need to keep monitoring the full policy landscape—IRA, 340B, ASP, transparency—not just focus on one piece in isolation. Second, this is the moment to bring forward ideas and actually help shape where things go. There’s a lot of innovation already emerging in new models, and I’m optimistic that if we stay engaged and proactive, we can make real progress.

Pashazadeh: I’d say the key is to focus on maximizing positive patient impact while minimizing the negatives. Don’t leave this solely to lawyers, academics, universities, or policy makers—history shows where that leads. Start by clearly understanding the sustainable outcomes you’re aiming for, and then work backward to design the right inputs and strategies to achieve them.

Van Antwerp: I’d summarize any idea through 3 lenses: safe, simplify, support. First, is it saving money—for patients out-of-pocket or for the client? Second, does it simplify health care, looking from the outside in rather than the inside out, focusing on what actually helps the consumer? And third, does it support patients, making it easier for them to navigate this overly complex system? Keeping those 3 principles front and center is a helpful way to evaluate reform ideas.

Masia: What I’d be looking for is something like what happened with the 17 CEOs under the Trump administration—maybe a smaller subset—where the White House announces a deal in the Rose Garden. My guess is it would combine policy-enabled direct-to-consumer models that don’t disrupt the current system, a major US manufacturing push, and a guarantee that the US gets first access to the drug globally. That feels like the most likely path to a resolution.