A provocative brief from Charlie Katebi at the America First Policy Institute suggests US policymakers use CMS rules and US trade power to maintain higher drug prices globally.

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THE THESIS

Countries paying less than 25% of US prices while investing half as much in R&D are "freeloading" on American innovation.

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THE MECHANISM

The policy proposes a refreshing new twist on international reference pricing by favoring current US pricing and using Most Favored Nation trade status and Medicare coverage as leverage - offering discounts abroad could mean losing US market access.

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THE IMPACT

For pharma leaders, if enacted, a few potential consequences come to mind:

• Constrained international pricing flexibility, undermining companies' ability to meet ex-U.S. access requirements
• Effectively tying ex-U.S. pricing behavior to U.S. reimbursement and trade status, turning routine market access strategy into a matter of federal oversight
• Access delays for ex-U.S. patients and lower prioritization of global launches as companies weigh the risks and likelihood of achieving much higher price targets -- especially if companies must maintain price parity OR lose US Medicare access

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THE PRECEDENT

The IRA drug price negotiations offer a revealing benchmark. They're expected to save the government billions while reducing pharmaceutical revenues by roughly 30%. AFPI claims their approach would add billions back to pharma revenues through higher global prices. If this vision fails to materialize, these policies may further erode pharmaceutical revenues, ultimately limiting funds available for developing new treatments.

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THE REALITY CHECK

Ironically, years ago, I negotiated with an international government that demanded parity with a very particular "US government price," which, surprisingly, was nearly the lowest in the world. Some US price benchmarks are similar or lower to the wealthy country price (340B, FSS, Best price), while others are much higher (List Price, ASP, AMP). In a fragmented system like ours, pricing is not always what it seems.

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THE BURNING QUESTION

As US policy reshapes global drug pricing, market access teams face a critical question: What happens when offering discounts abroad threatens your business at home?

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‍Betsy J. Lahue is CEO of Alkemi, where she helps life sciences companies solve acute value & access challenges and address emerging competitive threats. Her insights on market access and commercialization have guided successful launches across therapeutic areas.