Antimicrobial Resistance (AMR) Project
- The Most Favored Nation (MFN) policy uses the lowest international adjusted price for medicines across a select basket of countries to set drug prices in the U.S. market (the “MFN Price”).
- Assuming the top 50 drugs by spending in each of Medicare Parts B and D are impacted by an 85% gross price reduction due to MFN, which would also then spillover into Medicaid, 340B, and hospital ASP’s, we would expect to see the following impacts between 2025 - 2034:
- A loss of 1.98 to 2.22 million jobs, representing 40% of current U.S. jobs in the biopharmaceutical industry, with 472,000 being employed directly and 1.7 million being employed indirectly.
- The largest job losses would occur in California, Florida, Texas, and New York.
- A loss of $600 billion in federal tax revenue and over $450 billion state tax revenue.
- A loss of up to $2.4 trillion in earnings generated by the biopharma sector.
- Spillover impacts of MFN into Medicaid, 340B and ASP +6 payments represent more than 600,000 of the total jobs lost.
- A sensitivity analysis restricting the impacts of MFN to roughly half of the net price reduction was also calculated finding the loss of nearly 1.03 million jobs, assuming spillover effects.
- MFN will lead to an annual reduction in ASP payments to hospitals from $2 billion to $700 million; losses of this size would lead to the closure of many community and rural treatment centers.
- With an 85% reduction in the gross U.S. prices due to MFN, we would also expect to see the following reductions in U.S. Biopharma Key Performance Indicators:
- The disappearance of nearly all VC funding for early and late-stage companies.
- A 48% reduction in authorized biopharma patents.
- MFN will increase the risks to U.S. economic security by incentivizing the competitiveness and growth of China’s biopharma sector.
