When the United States makes a move, the world adjusts.
The Trump administration is reviving its “𝗠𝗼𝘀𝘁 𝗙𝗮𝘃𝗼𝗿𝗲𝗱 𝗡𝗮𝘁𝗶𝗼𝗻” (𝗠𝗙𝗡) pricing policy, which would force drug companies to match American prices to the lowest levels charged in other high-income countries. While Malaysia isn’t on the MFN country list, this policy could still affect us in important ways.
🧩 𝗪𝗵𝘆 𝗱𝗼 𝗱𝗶𝗳𝗳𝗲𝗿𝗲𝗻𝘁 𝗰𝗼𝘂𝗻𝘁𝗿𝗶𝗲𝘀 𝗽𝗮𝘆 𝗱𝗶𝗳𝗳𝗲𝗿𝗲𝗻𝘁 𝗽𝗿𝗶𝗰𝗲𝘀 𝗳𝗼𝗿 𝘁𝗵𝗲 𝘀𝗮𝗺𝗲 𝗺𝗲𝗱𝗶𝗰𝗶𝗻𝗲?
It’s based on an idea from economics called 𝗥𝗮𝗺𝘀𝗲𝘆 𝗽𝗿𝗶𝗰𝗶𝗻𝗴: charge more in wealthier countries and less in countries with lower incomes. This leads to a common pharmaceutical pricing strategy known as the differential pricing. Think of it like airline tickets—passengers on the same flight may pay different fares depending on when or how they booked, but everyone still gets to fly.
This system helps drugmakers cover their high R&D costs while keeping medicines affordable in less wealthy countries. But MFN disrupts this dynamics.
📉 𝗛𝗲𝗿𝗲’𝘀 𝗵𝗼𝘄 𝗶𝘁 𝗰𝗼𝘂𝗹𝗱 𝗮𝗳𝗳𝗲𝗰𝘁 𝗠𝗮𝗹𝗮𝘆𝘀𝗶𝗮:
Pharmaceutical companies often delay launching new drugs in lower- and middle-income countries (like Malaysia) to avoid triggering pricing benchmarks that affect their earnings in larger markets. If the U.S. adopts MFN, this pressure becomes even stronger. Companies may:
• Postpone launches in smaller markets to prevent setting a “too low” price that may cascade back to the U.S. through MFN
• Refrain from offering discounts in countries outside the MFN list, including Malaysia
• Standardize or increase prices globally to protect U.S. revenue
So even though Malaysia isn’t directly referenced in the MFN policy, the ripple effects could still restrict timely access to new medicines.
🔍 𝗪𝗵𝗮𝘁 𝗰𝗮𝗻 𝗠𝗮𝗹𝗮𝘆𝘀𝗶𝗮 𝗱𝗼?
• Strengthen value-based pricing and health technology assessment (HTA)
• Adopt innovative access pathways (e.g., early access or managed entry agreements)
• Champion regional procurement through ASEAN (like Europe’s Benelux Initiative)
• Build strategic local manufacturing capacity beyond generics
President Donald Trump signed an executive order directing drugmakers to lower the prices of their medicines so they line up with what other countries pay.
Trump's order puts the U.S. trade representative and the Department of Commerce on a 30-day deadline to give drugmakers the price targets, with the government taking further action to lower prices if those companies do not make "significant progress" towards those goals within six months of the order being signed.
What do we know?
-Not much at this point. The next 30 days will provide more details of the plan.
-With 4% of the world's population, the U.S. subsidises 75% of total pharmaceutical spend globally.
-The Inflation Reduction Act reduced drug prices on a handful of brand medications, but the U.S. still pays substantially more than other countries.
-The U.S. plans to make Europe pay higher prices to offset the lower prices we expect to pay under the order and "make drugmakers whole."
-The U.S. will "defend Pharma" if Europe doesn't agree to pay more of their "fair share."
-Pharma continues to try and shift focus and blame towards PBMs for high drug prices.
What do I think?
-With the current plan reliant on other countries, specifically Europe, I don't expect anything to happen quickly.
-Pharmacy inventory, and understanding how the order will apply to retail vs. medically infused medications, will take time to flush out and mega corporations like wholesalers etc. can't turn on a dime.
-Expect generic drugs to be largely left alone; could generics increase to offset brand drug reductions?
-Rebates may be eliminated entirely, turning the PBM industry on it's head.
If nothing at all gets accomplished, shining a light on the issues that face patients and plans is a huge step in the right direction.
President Trump’s executive order to cut drug prices up to 80% isn’t winning over everyone.
Former pharmaceutical executive William Soliman joined “Elizabeth Vargas Reports” on Monday to discuss the president’s order, which aims to reduce the bill for Americans at the pharmacy.
The order relies on voluntary compliance from companies and international cooperation, leading Soliman to question its overall feasibility.
“The issue really with this executive order is it’s missing a lot of details. So it’s a lot of bark and no bite, from my perspective, because (at) the end of the day, you not only [have] to get the pharma companies to agree, but you’ve also got to get the other countries to tell you what the retail prices [are],” Soliman said.
“There’s actually nothing to force them to do that, right? So for a lot of these pharmaceutical companies, there’s very little incentive, obviously, to do that.”
Soliman says one of the primary reasons Americans pay vastly more for medical drugs is that the governments of foreign nations negotiate the price. However, in the United States, “middlemen” known as pharmacy benefit managers negotiate drug pricing, rebates, and discounts on behalf of the health insurers.
“In the United States, over half of the population gets their insurance through their employers. It’s private insurance,” he explained. So for those not on medication, “it’s not going to actually make much of a difference.”
Instead, Soliman suggests many may receive no savings, and in one instance, may have to pay more.
“There could be a higher co-pay, because the pharma company may offset the loss of revenue on the Medicare side, which is about 20% of the country,” he added.