H.R. 7837: Most Favored Patient Act of 2026

This bill, titled the Most Favored Patient Act of 2026, aims to amend the Social Security Act to introduce a new pricing model for prescription drugs under the Medicare and Medicaid services. Here’s a breakdown of what the bill does:

Most Favored Nations Pricing Model

The bill mandates the Center for Medicare and Medicaid Innovation to implement a "Most Favored Nations" (MFN) pricing model starting January 1, 2029. This model requires that:

• Price Setting: Each pharmaceutical manufacturer must offer covered drugs at the most favored nation price, which is defined as the second-lowest applicable net price for a drug sold in multiple countries.
• Eligibility: The model targets "most-favored-nation price eligible individuals," which includes those receiving medications from pharmacies and healthcare providers under specific Medicare or Medicaid plans.
• Mandatory Reporting: Manufacturers are required to report necessary pricing information to the Secretary of Health and Human Services to facilitate the MFN model.

Implementation and Duration

The MFN pricing model is set to be conducted over a period of five years, ending in 2034. This implementation period allows time to assess its effectiveness and impact on drug pricing.

Exceptions and Agreements

There are specific exceptions that allow the Secretary to suspend the MFN requirements for certain drugs until April 1, 2029, should it be believed that a manufacturer will enter into a covered agreement before this date. A covered agreement is a deal between a drug manufacturer and the Secretary, which requires the manufacturer to provide drugs at the MFN price in exchange for increased manufacturing commitments in the U.S.

Definitions and Scope

The bill provides definitions for key terms:

• Covered Drug: A drug that sold in at least two reference countries during the specified year.
• Reference Countries: The bill cites countries such as Canada, France, Germany, and the United Kingdom as references for establishing drug prices.
• Manufacturer: Refers to companies producing the covered drugs.

Regulatory Involvement

The oversight of the implementation involves multiple congressional committees. The Committees on Energy and Commerce and Ways and Means from the House, and Finance and Health, Education, Labor, and Pensions from the Senate are mentioned as the relevant bodies for this legislation.

Key Dates

Important dates outlined include:

• January 1, 2029: The MFN pricing model is set to begin.
• April 1, 2029: By this date, any required reports or exceptions should be addressed.
• December 31, 2028: Deadline for manufacturers to enter into covered agreements to potentially avoid MFN pricing requirements.

Relevant Companies

• PFE (Pfizer Inc.): As a major pharmaceutical manufacturer, Pfizer could be impacted by the requirements to adjust its pricing strategies for covered drugs based on the MFN model.
• LLY (Eli Lilly and Company): Similar to Pfizer, Eli Lilly may need to realign its pricing structures for drugs sold in the U.S. to comply with MFN pricing regulations.
• MRK (Merck & Co., Inc.): Merck's pricing for covered drugs could be affected under the new MFN pricing framework, especially for drugs that are newly covered.