Most Favored Nation Price Controls Do Not Favor Patients
As Americans gather with family and friends to celebrate Thanksgiving, healthcare costs are one of their main concerns. President Trump has made lowering drug prices and increasing domestic biopharmaceutical research and development high priorities in his second term in office. Domestic investment by drug companies has skyrocketed since Eli Lilly was the first company to announce a $27 billion plan in February 2025. And as Citizens Against Government Waste (CAGW) noted in an October 1, 2025, blog post, President Trump “can achieve both objectives without imposing price controls, which includes Most Favored Nation (MFN) polices, reforming the 340B Drug Discount Program, and eliminating the Center for Medicare and Medicaid Innovation (CMMI).”
Price controls in any industry, including biopharmaceuticals do not work and will inevitably lead to shortages and disrupted markets. CAGW made this clear in its June 26, 2025, comments on MFN to the United States Trade Representative, an August 2020 letter to President Trump signed by 63 organizations, and a November 2020 blog post, “Most Favored Nation Policy Is Unfavorable to U.S. Biopharmaceutical Research.” The post noted how the adoption of strict price controls in European countries led to the U.S. going from 40.8 percent of research and development in 1990 to 58.3 percent in 2017. The U.S. should not do anything that would reduce its global leadership in drug research and development like adopting other countries’ price controls.
Adopting MFN would also have disastrous effects on patients. An August 2022 University of Chicago issue brief found that price controls would increase healthcare spending by $50.8 billion over the next 20 years and lead to 135 fewer drugs, which will have a negative impact on 2.47 million patients. As CAGW noted in a December 18, 2021, blog post, price controls would lead to an “invisible graveyard of Americans.”
In President Trump’s first term, the Council of Economic Advisers’ February 2020 report found that American patients pay more for biopharmaceutical drugs due to free-riding and price controls by foreign countries and that reducing both would increase competition and lower drug prices for Americans. Rather than adopt MFN, the administration should include drug pricing in its trade negotiations with foreign countries.
Implementing MFN price controls through the Center for Medicare and Medicaid Innovation (CMMI) should also give taxpayers pause. CMMI, which was created as part of the Affordable Care Act, has a poor track record of delivering on its mission of saving money. According to the Congressional Budget Office, instead of savings an initially projected $2.8 billion between 2011 and 2020, CMMI cost taxpayers $5.4 billion. In a November 7, 2025, statement CAGW President Tom Schatz said “integrating CMMI’s abysmal track record with importing price controls from countries with socialized medicine is a terrible combination that will fail to reduce prices, stifle innovation, and end badly for taxpayers. There is nothing ‘GENEROUS’ about this model, other than the amount of money it will waste.”
President Trump and his administration should avoid adopting a dangerous and harmful policy like MFN. A better alternative to reduce prices is cutting out wasteful spending on healthcare. One way to do this is reforming the 340B Drug Discount Program. 340B was created in 1992 and designed to help low-income patients receive the medications they need at an affordable price by having manufacturers offer a discount on their drugs. However, due to there being no definition of an eligible patient and a lack of oversight, this program has been abused by hospitals and pharmacies to inflate their profits. Reforming the 340B program, including defining an eligible patient, would reduce wasteful spending and lower drug prices for Americans.
President Trump is right to make lowering costs a priority in his second administration. The best way to achieve this goal is by rejecting price controls, reducing wasteful spending, reforming 340B, eliminating CMMI, and not adopting MFN.
