Following the Trump Administration’s executive order requiring drug manufacturers to reduce their drug prices to the level other countries typically pay in accordance with a “most favored nation” policy, the September 29 deadline for drugmakers to have shown progress on this front is upon us. This policy would spell disaster for one of the most promising and innovative federal programs, Medicare Part D – already under assault from the ill-considered drug pricing policies in the Inflation Reduction Act – as American Action Forum President Douglas Holtz-Eakin explores in a new insight.

He concludes:

The establishment of MFN pricing is a threat to Medicare Part D.  The program – arguably one of the United States’ most successful entitlements, with broad participation, high beneficiary satisfaction, and powerful controls of participant and taxpayer costs – would be transformed into its exact opposite. There would be no benefit to tailoring formularies to different needs of seniors. There would be no negotiation to control future drug costs. The drug benefit would be transformed into an expensive, one-size-fits all government single-payer system.

Read the analysis.