Drug Pricing Shift: Unpacking Trump's Most-Favored-Nation Deals

Hook

Three new drugs will soon reveal the true cost of Trump's most-favored-nation deals. This is the first public test of whether the agreements actually lower prices for Americans. For decades, U.S. patients have paid the highest drug prices in the world, often two to three times more than in countries like Canada or Germany. Now, these deals promise to align domestic prices with those of other wealthy nations, but the lack of transparency has bred skepticism. The launches of Baxfendy, Awiqli, and Veppanu will be the first real test of whether this policy works.

The Science

The most-favored-nation deals, struck with 17 drugmakers, require companies to launch new drugs in the U.S. at net prices roughly equal to those in other wealthy nations. However, the precise terms are secret. Until now, the public has had no clear view of how these agreements work in practice. The concept is straightforward: if a company sells a drug in other developed countries at a certain price, it cannot charge significantly more in the U.S. But the implementation details are complex, including how rebates and discounts are calculated.

The three drugs set to launch in the coming months are Baxfendy (for hypertension, from AstraZeneca), Awiqli (insulin, from Novo Nordisk), and Veppanu (a cancer drug developed by Arvinas and Pfizer, licensed to Rigel Pharmaceuticals). Notably, Baxfendy and Veppanu are not yet available in other wealthy countries that are used as comparisons for reference pricing. This means their U.S. launch prices could set a global precedent. Awiqli, on the other hand, is already sold in several European countries, so its U.S. price can be directly compared. Insulin has been a flashpoint: the list price of insulin in the U.S. has skyrocketed over the past decade, while in other countries it remains stable due to government controls.

“The first public look at drug prices under Trump's most-favored-nation deals will reveal whether the strategy actually reduces costs for patients.”

Key Findings

• Three pioneering drugs: Baxfendy (hypertension), Awiqli (insulin), and Veppanu (cancer) will be the first to show prices under the new agreements. Each represents a different therapeutic category, allowing assessment of impact across diverse areas.
• Secret terms: Although 17 companies signed, the exact terms of the most-favored-nation deals are not public. This has drawn criticism from patient advocacy groups demanding greater transparency.
• International reference: Prices will be compared to those in other wealthy nations, but Baxfendy and Veppanu are not yet available in those markets. This complicates reference pricing and may lead to opaque negotiations.
• Access impact: If prices are lower, it could improve access to essential medicines for millions of Americans. An estimated one in four patients with chronic conditions do not take their medications as prescribed due to cost.

Why It Matters

This is a pivotal moment for U.S. pharmaceutical policy. For decades, the U.S. has paid the highest drug prices in the world. The most-favored-nation deals promise to align domestic prices with those of other developed countries, potentially slashing costs for patients and the healthcare system. A recent study estimated that if U.S. drug prices were aligned with Canadian prices, annual savings would exceed $100 billion.

However, the lack of transparency in the terms breeds skepticism. Will companies truly comply? Or will they find ways to circumvent the spirit of the agreement, such as launching first in the U.S. and delaying launches in other countries? The upcoming launches will be a litmus test. If the prices of Baxfendy, Awiqli, and Veppanu are notably lower than typical U.S. prices, other companies may feel pressure to follow suit. But if prices remain high, the credibility of the policy will be seriously damaged.

For patients with hypertension, diabetes, or cancer, this could mean the difference between affording their treatment or not. Insulin, in particular, has been a symbol of the affordability crisis in the U.S., with prices skyrocketing over the past decade. A vial of insulin that costs $30 in Canada can cost over $300 in the U.S. If Awiqli launches at a price close to the Canadian level, it would be a milestone.

Your Protocol

If you are taking any of these drugs or their equivalents, here are practical steps:

1. 1Monitor launch prices: When Baxfendy, Awiqli, and Veppanu become available, compare their prices to your current medications. Use tools like GoodRx or consult your pharmacy. Note both the list price and the net price after discounts, as the deals are based on net prices.
2. 2Talk to your doctor: If your current treatment is costly, ask whether any of these new drugs could be an option. Hypertension and diabetes have multiple alternatives, but a new drug may offer additional benefits or fewer side effects. Bring a list of your current medications and their costs.
3. 3Check your insurance: Health plans may take time to add new drugs to their formularies. Verify whether your insurance covers these drugs and what your copay would be. If not covered, ask if your doctor can request prior authorization or if patient assistance programs are available.
4. 4Stay informed: Follow news about these launches. Prices could change rapidly if public pressure mounts or adjustments are made to the deals. Subscribe to alerts from organizations like Patients for Affordable Drugs or the Kaiser Family Foundation.

What To Watch Next

The coming months will be critical. Beyond the three drugs mentioned, other drugs from the 17 signatory companies may launch under similar terms. Watch for legal or political challenges that could test the agreements. For instance, some companies might argue that the deals violate their intellectual property rights or that price comparisons are unfair due to differences in healthcare systems.

Also, observe how insurers and pharmacy benefit managers (PBMs) react. If net prices drop, they may adjust their formularies to favor these drugs, as seen with CVS adding Lilly's Zepbound back to its formularies. But if PBMs demand additional rebates, savings may not reach patients. Additionally, Congress may consider legislation to make these deals permanent or expand them, depending on outcomes.

The Bottom Line

The most-favored-nation deals represent a bold experiment in U.S. drug pricing. The launches of Baxfendy, Awiqli, and Veppanu will be the first real test of their effectiveness. If they work, they could pave the way for a more equitable system. If not, the search for solutions will continue. Stay vigilant: your financial health may depend on it. The transparency these launches bring is a step forward, but much remains to be done to ensure medications are affordable for all.