Experts Warn MFN Drug Pricing Could Raise Costs, Reduce Treatment Options
Experts warn that Most Favored Nation drug pricing policies, including Florida's HB 697, could increase patient costs, reduce access to new treatments, and undermine pharmaceutical innovation while failing to guarantee savings reach consumers.
Experts are warning that Most Favored Nation (MFN) drug pricing policies, including a Florida bill that would cap prescription drug prices through foreign reference pricing, could ultimately raise patient costs while reducing access to new treatments and undermining pharmaceutical innovation.
MFN pricing ties the price of prescription drugs to the lowest price paid by certain foreign nations. The U.S. pharmaceutical system operates on a national scale, designed to ensure medicines can move efficiently across state lines. Many pricing decisions are made on the reimbursement side, where insurers and pharmacy benefit managers (PBMs) determine which medications appear on formularies, how much patients pay, and which pharmacies they can use.
Florida's HB 697 attempts to cap drug prices through foreign reference pricing, but critics argue the bill has no requirement that savings from reference pricing actually reach patients. Without guardrails, insurers and PBMs, not consumers, would retain the benefit. The bill's assumptions don't reflect how the U.S. drug system works, and a single-state pricing mandate cannot simply be layered on top of the national supply chain.
Florida now ranks among the top states in the nation for clinical trials, biotech manufacturing, and medical technology companies. More than 117,000 Floridians work in life sciences across biopharma, MedTech, research institutions, digital health, and advanced manufacturing. Since 2012, Florida has outpaced the nation in pharmaceutical and medical device job growth, startup formation, and research expansions.
Rural communities already struggle with limited access to specialists, long travel times, and hospitals operating on thin margins. If MFN pricing undermines investment that supports new treatments and cures, rural patients are likely to feel the consequences first, with fewer breakthrough treatments, longer waits, and more reliance on outdated medications.
Countries that rely on foreign reference pricing models achieve lower prices by restricting or delaying access to new treatments, often for years. Only about half of new medicines reach patients abroad, while nearly 90% reach U.S. patients. Importing foreign pricing means importing foreign access limits, which undermines the foundation of competitiveness.
China has made its ambition to dominate biotechnology, pharmaceuticals, and advanced manufacturing clear. While the U.S. debates policies that would shrink investment in research and development, China is pouring billions into its labs, talent pipelines, and state-backed companies. If MFN pricing discourages U.S. firms from taking risks, launching new research programs, or scaling up domestic production, the country could become increasingly dependent on foreign supply chains.
Alternative state-level reforms that could lower costs include applying negotiated rebates directly at the pharmacy counter, increasing PBM transparency, and modernizing PBM compensation so savings flow to patients rather than middlemen. Proponents argue these solutions improve affordability without jeopardizing access or undermining the innovation ecosystem.