MichBio Raises Concerns Over MFN Language in Senate DHHS Budget
As the Michigan Senate considers the FY budget for the Department of Health and Human Services, MichBio is raising strong concerns about the inclusion of “Most Favored Nation” (MFN) drug pricing language in SB 857.
The provision would tie Medicaid drug reimbursement to prices set in foreign countries - an approach that stakeholders across the life sciences ecosystem warn could have far-reaching consequences for patients, providers, and Michigan’s biopharma sector.
In a letter to lawmakers, MichBio cautioned that the proposal “would import foreign price-setting mechanisms into Michigan Medicaid without sufficient clarity or consideration of its impact,” and could ultimately “reduce patient access to medicines, limit treatment options, and undermine Michigan’s leadership in life sciences innovation.”
Patient Groups Sound the Alarm
MichBio’s concerns are echoed by national patient and disability advocates. In a separate letter to Senate Appropriations Chair Sarah Anthony, the Partnership to Improve Patient Care (PIPC) - representing more than 100 patient and disability organizations - warned that MFN policies risk importing discriminatory value frameworks into U.S. healthcare.
PIPC specifically highlighted the reliance in many foreign systems on quality-adjusted life year (QALY) metrics, stating that such approaches “devalue disabled lives” and have “detrimental implications for access to needed care and treatment.” The group noted that referencing foreign prices effectively imports these methodologies, which have been associated with delayed or restricted access to treatments in other countries.
Risks to Patient Access and Care
Evidence from countries that use similar pricing models shows significantly reduced access to new medicines compared to the United States. Patients may face delays, limited availability, or be directed toward less effective alternatives. Federal analysis of prior MFN proposals has also acknowledged that such policies could lead patients to postpone or forgo treatment.
Implications for Innovation and Michigan’s Economy
MichBio also emphasized the potential impact on Michigan’s life sciences sector - one of the state’s key innovation drivers. By constraining revenues that support research and development, MFN-style policies could slow the pace of new drug development and weaken the state’s competitive position in a rapidly evolving global market.
At a time when international competition is intensifying, particularly from China, stakeholders warn that policies discouraging domestic investment could have long-term consequences for both economic growth and patient outcomes.
Misses the Real Drivers of Cost
Importantly, MFN does not address the underlying drivers of high drug costs in the U.S., including supply chain inefficiencies and the role of intermediaries such as pharmacy benefit managers (PBMs). MichBio and others are urging policymakers to instead focus on reforms that increase transparency, ensure savings reach patients, and preserve flexibility in Medicaid negotiations.
A Call for Thoughtful Policy
As budget negotiations continue, MichBio is encouraging lawmakers to carefully consider the broader implications of MFN language.
“Michigan should seek solutions that preserve patient access to a variety of treatment options and innovation,” the organization noted, “while prioritizing reforms targeting domestic inefficiencies - not policies that copy foreign systems ill-suited for U.S. patients.”
With both industry and patient groups aligned in opposition, the debate over MFN underscores the importance of balancing affordability with access, equity, and continued innovation in Michigan’s healthcare system.
