Presentation (CTI)

OBJECTIVES: US President Trump has resurrected plans to lower drug prices through international reference pricing (IRP) via an executive order known as the Most Favored Nation (MFN) Policy. The aim of this analysis is to assess potential pricing implications of the MFN policy on branded oncology medicines.
METHODS: The MFN currently calls for referencing the lowest price in Organization for Economic Co-operation and Development (OECD) countries with a gross domestic product (GDP) per capita 60%+ of the US’s (without purchasing power parity adjustment). The countries meeting this criterion are: Australia, Austria, Belgium, Canada, Denmark, Finland, Germany, Iceland, Ireland, Israel, Luxembourg, the Netherlands, Norway, Sweden, Switzerland, and the UK. Prices from GlobalData’s Price Intelligence (POLI) were compared for patent-protected oncology medicines across these countries. The most common pack was identified for each brand, and the lowest price taken across the 16 markets and compared to the pack’s current wholesale acquisition cost (WAC) price in the US.
RESULTS: Twelve branded oncology products were identified with a common pack across the US and the 16 reference markets. If the WAC price of these products was aligned to the lowest priced market in the basket, an average price reduction of 68% occurs, with price drops ranging from 9% to 97%. Price reductions were primarily dictated by Nordic markets since the lowest price for 42% of these packs was identified in either Sweden or Denmark, followed by Canada (25%).
CONCLUSIONS: Third-party profitability will be squeezed by significant reductions on list prices due to the MFN policy and subsequent confidential discounts. This oncology sample suggests WAC prices could decline by an average of 68%, largely triggered by already low prices in Nordic countries or Canada. However, the impact could be weakened or strengthened by the final form the MFN takes and what parameters are finally considered.