Over the weekend of May 10, 2025, President Trump posted that American drug makers would soon provide drugs at "most favored nation" pricing in the US - that is, the US price being pegged to the lowest price of any nation.
What happened on Monday, May 12, was different. As discussed by New York Times, DJT signed an executive order that drugmakers should take voluntary actions and some agencies should pursue somewhat vaguely described goals. NYT here. Executive Order here.
For example, "the Secretary of Health and Human Services (Secretary) shall facilitate direct-to-consumer purchasing programs for pharmaceutical manufacturers that sell their products to American patients at the most-favored-nation price."
And, IF "significant progress towards most-favored-nation pricing for American patients is not delivered, to the extent consistent with law: (i) the Secretary shall propose a rulemaking plan to impose most-favored-nation pricing."
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Let's rewind. In November 2020, shortly after the election, HHS released a Center for Medicare Innovation (CMMI) interim final rule (read: instant final rule) setting Medicare prices at the lowest international price. This was challenge in court, and eventually dropped (in the Biden administration). See some history from 2020 here.
CMMI, in Section 1115A of the Affordable Care Act, has extraordinary latitude to set demonstration projects, of undefined scope and duration, and they are not reviewable by the courts (per the law). However, the interim final rule was challenged as not having a clear rationale for being an emergency rule (with no comment period before implementation).
My reading is that HHS could issue a proposed rule for most favored nation pricing (MFN), taking 30 days comment, write a concise but rational response to comments, and then publish a final rule (say, at 60 days). This would then be unreviewable by the courts.
However, there would still be a lateral attack on the MFN if it is engineered this way. This is to challenge the statute itself (1115A) as unconstitutional, as an unconstitutionally vague delegation of authority from Congress to CMS.
I put an extensive Chat GPT discussion as a side bar to this blog.
https://brucedocumentblog.blogspot.com/2025/05/mfn-returns-from-2020-to-2025-ai.html
See also this blog from 2022 on whether CMMI might be found unconstitutional.
https://www.discoveriesinhealthpolicy.com/2022/01/gorsuch-court-writings-suggest-cmmi.html
