A Global Drug Price Tug-of-War and Why Americans Pay More | Simplefill
In the United States, consumers pay significantly more for the prescription medications they need than people in other countries. There are numerous factors that influence costs, including the lack of federal price controls and the absence of a central negotiating agency.
If you are struggling to afford your medications for cancer, COPD, or any chronic conditions, it can be frustrating to see that what you pay is not the same as what Canadians or Europeans pay. To address this issue, the Trump Administration has implemented the Most-Favored-Nation pricing plan. However, can it deliver the results you need?
Why Do Americans Pay More for Prescription Medications?
One of the main reasons why the United States has such high drug prices is that there isn’t a government agency ready to step in if a pharmaceutical company’s rates are too high. Instead, negotiations occur among thousands of health plans, reducing bargaining power. Companies don’t feel compelled to negotiate for lower prices.
Other countries also carefully consider what the proposed medication offers to decide whether they want it. If there are similar options on the market and the benefits of this new drug are not substantial enough to offset the higher costs, these countries reject the drug. That’s not the case in the United States.
Are High Prices the Cost of Drug Innovation?
The government doesn’t want to curb innovation, so it tries not to get involved. By not negotiating, however, pharmaceutical companies price their drugs with impunity.
There are no price controls in the United States, either. Once a drug receives FDA approval, pharmaceutical companies have the right to set its price as they wish. This leads to high starting rates and annual price hikes.
Under the Biden administration, laws were passed that give Medicare the chance to negotiate for better deals, but this only applies to certain drugs.
Additionally, the majority of the global research and development of new drugs occurs in the United States. This places the “burden” of innovation on the country, necessitating increased funding. The American consumer often foots that bill while other countries benefit from the research.
Can the Most-Favored-Nation Drug Pricing Plan Help?
The Most-Favored-Nation (MFN) pricing plan is designed to ensure that the United States pays no more for certain drugs than the lowest price paid by other developed countries. It strives to prevent unfairness and discrimination in international dealings. The goal is to have the United States pay the same rates for its drugs that other developed countries do.
On paper, the MFN policy appears to promise lower rates. In reality, it can lead to stifled innovation since companies may not want to invest in new medications. Instead, they could focus on just making minor modifications to existing options.
Companies could also postpone launching medications in countries that have stricter price regulations for fear of setting a low rate that all other countries will have to match. Fewer medication options mean less competition, leaving companies to price existing drugs as they prefer because they know there are no alternatives.
Get Affordable Access to Prescription Medications
Simplefill is a full-service prescription assistance company that researches, qualifies, and maintains patients’ enrollment in all sources of assistance available to them.
Apply today by calling 877-386-0206. A caring Simplefill representative will contact you within 24 hours to discuss your application and, if qualified, enroll you in the program.
Frequently Asked Questions
Have further questions about why your medications are so expensive? We can help.
Is the Most-Favored-Nation Policy Already in Place?
In May of 2025, President Trump signed an executive order that told the government to look for any ways of lowering drug prices. He also recently began a deal with Pfizer to ensure that the company offers MFN prices.
Can the Most-Favored-Nation Policy Lower Prices Rapidly?
The MFN has the potential to quickly lower medication rates. By placing limits on what the United States can be charged for drugs, it forces pharmaceutical companies to lower rates for specific drugs. This, in turn, can lead to an overall price drop in similar medications.
Will Most-Favored-Nation Policies Impact U.S. Pharmaceutical Companies?
U.S.-based pharmaceutical companies can be impacted directly and indirectly by the Most-Favored-Nation policy. If they offer better rates to other countries, the U.S. can demand those same rates. Additionally, if costs are much lower for a competing medication, companies will strive to match those prices to remain competitive.
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