MFN Pricing and the Quiet Surrender of U.S. Biotech Leadership
The recent White House announcement of “The Great Healthcare Plan” landed with familiar fanfare: bold promises to lower drug prices, expand access, and rein in costs for American families. At the center of the proposal is a renewed push to codify Most Favored Nation (MFN) pricing - a policy that would tie what the U.S. pays for certain medicines to the lowest prices paid by other countries. On its face, the idea sounds straightforward and politically appealing. In practice, codifying MFN would undercut the very ecosystem that makes American biotech the global engine of medical innovation—and ultimately reduce access for patients who are waiting for the next breakthrough.
The United States leads the world in biotechnology not by accident, but by design. Our system rewards risk-taking, long development timelines, and scientific failure as the price of eventual success. Biotech companies - especially early-stage and venture-backed firms - invest billions of dollars over a decade or more to bring a single therapy from the lab bench to the bedside. Most programs fail. Those that succeed must not only help patients but also sustain the capital flows that fund the next generation of innovation. MFN pricing severs that feedback loop.
By anchoring U.S. prices to those set by foreign governments, MFN effectively imports other countries’ industrial policies into our healthcare system. Many of those systems rely on centralized price controls, delayed market entry, or outright rationing to manage costs. The result is well documented: patients abroad often wait years longer for access to new therapies, and some never gain access at all. Codifying MFN would make those dynamics unavoidable here, regardless of how innovative or clinically valuable a new therapy might be.
For emerging biotech companies, the impact would be immediate. Venture investors make decisions based on the expected future value of successful products. If that value is capped by external price controls - especially ones disconnected from U.S. market realities - capital will flow elsewhere. Programs that target smaller patient populations, rare diseases, or technically challenging modalities will be the first to disappear. These are precisely the areas where biotech has delivered some of its most transformative advances over the past decade.
Patients would feel the consequences not as a line item on a federal budget, but as fewer options, slower progress, and diminished hope. Lower list prices mean little if the therapy never gets developed, never reaches the market, or never gets scaled. Access is not just about affordability; it is about availability. A policy that discourages innovation upstream inevitably restricts access downstream.
There is also a broader competitiveness question at stake. Biotech leadership is a strategic asset for the United States, intersecting with economic growth, national security, and global health preparedness. Codifying MFN would signal to innovators and investors that the U.S. is willing to trade long-term leadership for short-term optics. Other countries are moving aggressively to attract life sciences investment through supportive regulatory environments, public-private partnerships, and targeted incentives. MFN would push American innovation into that global competition with one hand tied behind its back.
None of this is to suggest that drug affordability is not a real concern, or that the status quo is perfect. But durable solutions must address the root causes of high costs - inefficiencies in the healthcare delivery system, misaligned incentives, and gaps in competition - without dismantling the innovation engine that delivers new cures. Policies that preserve market-based pricing while expanding value-based contracting, accelerating competition, and modernizing reimbursement can improve access without sacrificing leadership.
“The Great Healthcare Plan” sets out an ambitious vision. The challenge now is ensuring that the path chosen does not inadvertently erode the very strengths that have made the U.S. biotech sector a global model. Codifying MFN may promise savings on paper, but the real cost would be measured in lost innovation, delayed treatments, and patients left waiting for breakthroughs that never come.
