Overview

As a trusted partner, Prime Therapeutics (Prime) is committed to keeping you informed about key developments in the health care and policy landscape.

Yesterday, President Donald Trump signed an Executive Order (EO) aimed at addressing drug pricing disparities between U.S. and foreign markets

through a “most-favored-nation” (MFN) framework. Contrary to expectations that it would mirror the 2020 Medicare Part B MFN model, the EO introduces broader measures focused on importation and direct-to-consumer (DTC) sales of drugs by pharma with impacts across all market segments. 

Key provisions 

• DTC sales: The Secretary of Health and Human Services (HHS) is to consider facilitating DTC programs for pharmaceutical manufacturers that sell their products to American patients at the MFN (i.e. lowest foreign) price. This EO could further programs where pharma sells directly to consumers through their own websites. According to news reports, Pfizer, following in Eli Lilly’s footsteps, just set up its own DTC website.
• MFN targets: Within 30 days, the Secretary of HHS, in coordination with other officials, will communicate MFN price targets to pharmaceutical manufacturers. If significant progress is not made within 180 days, the Secretary will propose a rulemaking plan to impose MFN pricing and consider certifying to Congress that implementing importation will reduce prescription drug costs without additional risk to public health and safety. Canada has said it will not cooperate with importation to the U.S.
• Trade enforcement: The U.S. Trade Representatives and Secretary of Commerce would be required to ensure that foreign countries are not doing anything that would result in Americans paying more for drugs or paying “for a disproportionate amount of global pharmaceutical research and development.”

​​​What you should know 

• The policy is still in early stages: Implementation planning is underway, with pilot programs and regulatory proposals expected over the next 30–90 days.
• The EO lacks clarity: Limited detail on how these programs will be carried raises several questions including (1) whether DTC programs would be included in or outside of health benefit plans, (2) consumer affordability even at MFN prices, and (3) how pharmacies would or would not dispense / be compensated at MFN prices. 
• The EO signals an effort to bypass PBMs: ​​​​​During the press conference announcing the order, President Trump stated, "We will cut out the middlemen. We don't know who they are, and they're rich." Most analyses of the EO indicate there are likely to be legal challenges to the order.

What Prime is doing

While we expect additional clarity around the EO details, Prime is actively analyzing potential impacts and strategies under various scenarios, such as DTC pricing and MFN benchmark impacts on formulary strategy, rebate structures and member cost-sharing.

Next steps 

Prime will remain actively engaged in monitoring these evolving developments. Our priority is to ensure the best possible experience and support for you and your members. As new information becomes available, we are committed to keeping you informed with timely and relevant updates.

We will also continue to reinforce the vital role Prime plays in the health care ecosystem — serving as a critical check on pharmaceutical list prices, safeguarding access to life-saving medications and advancing positive health outcomes.

In the meantime, please refer to the information provided in this email or contact your designated account team representative with any questions or concerns.