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Most Favored Nations

Based upon reporting, it appears that the Trump Administration will be issuing an Executive Order adopting the concept of “Most Favored Nations” as it applies to pharmaceuticals. See my prior blogs:

It appears also that there are arguments now being made opposing this concept. The objections focus on reduced profits for the pharmaceutical companies, reduced revenue to provide for Research and Development, and the potential for significant price rises in other countries.

Obviously, continuation of the same level of revenue, in circumstances where the United States would be paying no more than the lowest price charged for a pharmaceutical anywhere else in the world would require the pharmaceutical companies to raise their prices in many other markets. That effectively would allow them to avoid having to decrease prices in the United States, since the disparity in pricing between the United States and other countries would no longer exist as the result of an increase in prices charged in other countries. .Without raising prices charged outside of the United States, pharmaceutical companies will not have the same revenue flow that permits them to experience both the profit level and ability to conduct very expensive research and development which they have historically enjoyed.

The most likely outcome is a combination of all three, that is, that the price in other parts of the world will be raised, the revenue flow that provides for R&D will be reduced, and the profitability of the pharmaceutical companies will decrease.

However, it has reached the point where the American consumer should no longer bear a disproportionate burden of providing a revenue flow for research and development that is enjoyed by the rest of the world.

Further, it will be interesting to see how the cost of the American health care system will compare with those of other systems, if consumers in other countries begin paying higher prices for pharmaceuticals.

© 2020 Giordano, Halleran & Ciesla, P.C. All Rights Reserved National Law Review, Volume IX, Number 191


About this Author

Frank R. Ciesla, Giordano Law Firm Health Care Litigation Health Care Fraud and Abuse Tax Health & Hospital Law
Of Counsel

Mr. Ciesla is Chair Emeritus of the firm's Health Care Law Practice Area. His practice is primarily devoted to Health Care and Government Contracts Law. He counsels clients on legal developments facing healthcare providers in the modern health care environment. Firm clients include hospitals, nursing homes, physicians and physician groups, individual practice associations, home health agencies, ambulance carriers and industry-wide associations.

Mr. Ciesla advises such clients on business structures, mergers and consolidations, joint ventures, reorganization of health care providers...

Beth Christian, Giordano Law firm, Health Care Attorney,Health Care Fraud and Abuse, Cannabis Law, Non-Profit Law

Ms. Christian's practice is devoted to Health Care Law and legal issues facing Health Care facilities licensed professionals and non-profit organizations. She has over twenty years of experience counseling clients on legal issues facing the modern health care and non-profit communities.

Anjali Baxi, Giordano Halleran Law Firm, Healthcare Attorney, New Jersey health Law,Cannabis Law,Government Affairs,Business Transactions, Health Care Law Regulation, Medicare and NJ Medicaid Enrollment

Anjali has been practicing law for 15 years, mainly focused on health care transactional and regulatory matters. She prepares and reviews LOIs, purchase agreements and other transaction documents for health care providers needed for the business transfer and necessary for the transfer of NJDOH and NJDHS licenses and provider numbers. She also reviews agreements required for the day to day operations of health care facilities.

She has counseled skilled nursing, assisted living, adult medical day care, outpatient facility clients and hospitals regarding NJDOH regulatory requirements,...

Ari G. Burd, Shareholder, Giordano Law Firm, Labor & Employment, Cannabis Law, Health Care

Ari devotes his time to assisting and defending employers with regard to traditional employment issues. He frequently counsels employers for compliance with New Jersey laws and has extensive transactional and litigation experience.

Ari has litigated employment matters throughout the state, having made appearances in almost every Superior Court in New Jersey, as well as before both Federal District Courts in New Jersey and the Federal and State Courts in New York.  These actions have involved a diverse range of claims such as wrongful discharge, discrimination, harassment,...