Most Favored Nation Drug Pricing Will Flop

On May 12, President Trump took a big swing at cutting drug prices, issuing an executive order requiring Most Favored Nation (MFN) pricing, resetting U.S. drug prices based on the lowest price that a drug company charges overseas. The order is aimed primarily at wealthier European countries, which use national drug purchasing rules to force drug companies to charge much less there than in the U.S. Currently, as a share of GDP, total U.S. drug spending is about twice as high as in European companies.