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A new executive order from the Trump administration that slashes Medicare payments to hospitals and physicians for certain medicines will hurt patients’ access to care and financially stress already overburdened hospitals and innovation-based pharmaceutical companies, according to NCBIO, the NC Biosciences Organization.  

On Nov. 20, President Donald Trump announced an interim final rule with comment period that implements his long-expected Most Favored Nation drug-pricing model. The MFN rule ties prices of Medicare Part B drugs — medicines administered in a physician’s practice or hospital — to the lowest prices paid in Organization for Economic Co-operation and Development countries.  

“By reducing reimbursement, it’s going to be very difficult for smaller hospitals and medical practices, particularly those in rural areas, to provide patients with all the medicines that they need,” said NCBIO President Sam Taylor.  “Even as pharmaceutical companies reduce prices, the other parts of the Most Favored Nation rule will likely work to limit patient access to both existing and new life-saving medications on which they depend.”

Taylor said that initiatives like the MFN rule hamper innovation by discouraging investment in emerging treatments in areas such as cancer, sickle cell anemia, cystic fibrosis and other diseases where research lags. The innovation of the industry has been on display recently as pharmaceutical companies large and small have come together during the COVID-19 pandemic in a herculean effort that has produced not one but three viable vaccines to date in a matter of just months.

“This was a real moon-shot moment for the industry, and it delivered in a way that will vastly improve patient access to COVID-19 treatments and vaccines,” Taylor said. “Ultimately, schemes like the MFN rule will reduce patient access and stifle innovations. Patients end up being the biggest losers under the MFN rule.”

Taylor pointed out that the MFN Rule will also have a disproportionate impact on North Carolina’s life-science economy, the second largest producer of drugs in the United States. As of 2018, the latest year for which data is available, North Carolina is home to more than 70,000 biopharmaceutical and related clinical research and pharmaceutical distribution jobs. Since March of 2019, pharmaceutical companies have announced plans for more than $2.2 billion of capital investment in North Carolina and more than 2,000 new jobs.