MFN, IRA & Healthcare: Experts on System Strain

March 6, 2026 Ananya Mittal - World Editor

The US healthcare system is navigating a complex interplay of new policies and existing pressures, impacting drug pricing and access to care. Recent discussions, including a webinar unpacking the implications of the Inflation Reduction Act (IRA), Most Favored Nation (MFN) drug pricing and broader fiduciary responsibilities, highlight a system facing significant strain. Experts are urging stakeholders to adopt a comprehensive view of these changes, recognizing that isolated planning is no longer sufficient.

Navigating the Policy Landscape: IRA, MFN, and Fiduciary Duties

The core of the current challenge lies in the concurrent implementation of several key policies. The Inflation Reduction Act’s Medicare Drug Negotiation Program, designed to lower prescription drug costs for Medicare beneficiaries, is a central component. Simultaneously, the implementation of Most Favored Nation (MFN) pricing – which aimed to tie US drug prices to those in other developed countries – and increasing scrutiny of fiduciary duties are reshaping the pharmaceutical market. These forces are not operating in isolation. their combined effect is creating ripple effects throughout the healthcare ecosystem. As Avalere Health points out, stakeholders must anticipate both short-term and long-term consequences.

The MFN rule, initially intended to lower drug costs by referencing international pricing, faced legal challenges and was ultimately rescinded in 2024. However, its consideration has already prompted significant adjustments within the industry. The IRA, is actively being implemented, with the Centers for Medicare and Medicaid Services (CMS) selecting the first ten drugs for price negotiation in 2023. The negotiation process is expected to continue, with additional drugs being added to the list in subsequent years.

Impact on Stakeholders: A Broad Spectrum of Effects

The changes aren’t confined to pharmaceutical companies and insurers. Hospitals, physician practices, and even patients are feeling the effects. The interplay between these policies is influencing strategic planning, investment decisions, and the overall healthcare environment. Specifically, the Avalere Health analysis identifies several areas of impact:

  • MFP Effectuation: The implementation of Maximum Fair Price (MFP) calculations under the IRA.
  • Competitor Negotiation: How drug manufacturers respond to Medicare negotiation.
  • Direct Negotiation: The potential for direct negotiations between payers and manufacturers outside of the IRA program.
  • Part D Redesign: Changes to the Medicare Part D prescription drug benefit.
  • Inflation Penalties: Penalties for drug price increases exceeding inflation.
  • NIH/FDA Cuts: Potential impacts of budget cuts to the National Institutes of Health (NIH) and the Food and Drug Administration (FDA).
  • 340B Reform: Ongoing discussions about reforms to the 340B drug pricing program, which provides discounted drugs to certain healthcare providers.
  • PBM Reform: Increased scrutiny of Pharmacy Benefit Managers (PBMs) and their role in drug pricing.
  • DTC Access Strategy: The impact on Direct-to-Consumer (DTC) advertising and patient access to medications.

These areas are interconnected, creating a complex web of potential consequences. For example, changes to the 340B program could affect hospital finances, while PBM reform could alter drug pricing dynamics for insurers and patients. The AJMC webinar highlighted the require for a holistic approach to navigate these challenges.

Understanding the Core Policies

The Inflation Reduction Act (IRA): This landmark legislation allows Medicare to negotiate the prices of certain high-expenditure drugs. The goal is to lower costs for Medicare beneficiaries and the federal government. The first negotiated prices will take effect in 2026. It’s important to note that the IRA does not apply to all drugs; it focuses on those without generic or biosimilar competition.

Most Favored Nation (MFN) Pricing: This policy, initially proposed by the Trump administration, aimed to establish drug prices in the US based on those paid in other developed countries. However, it faced legal challenges and was ultimately withdrawn. While no longer in effect, the debate surrounding MFN pricing has influenced the conversation about drug pricing reform.

Fiduciary Pressures: These refer to the legal and ethical obligations of healthcare professionals and organizations to act in the best interests of their patients. Increasingly, there is a focus on ensuring that financial incentives do not compromise patient care. This includes scrutiny of relationships between healthcare providers, pharmaceutical companies, and insurers.

The Role of Prescription Drug Affordability Boards (PDABs)

Several states are establishing Prescription Drug Affordability Boards (PDABs) to monitor drug prices and recommend policies to control costs. These boards have the potential to influence drug pricing at the state level and could serve as a model for federal policy. The Avalere Health analysis highlights the ripple impacts of PDABs on investment decisions and strategic planning.

What Comes Next: A Continuous Process of Adaptation

The healthcare landscape is in a state of flux. The implementation of the IRA and the ongoing debate over drug pricing reform will continue to shape the industry for years to reach. Stakeholders must remain vigilant, monitoring policy changes and adapting their strategies accordingly. The process will involve ongoing evaluation of the IRA’s impact, potential adjustments to the program, and continued scrutiny of PBMs and other industry players. Further legislative action and regulatory changes are too possible. It’s a period demanding proactive planning and a willingness to embrace a dynamic market. Managed Healthcare Executive coverage of the recent webinar underscores the importance of understanding the political implications alongside the policy details.

For individuals, staying informed about changes to Medicare Part D and understanding their prescription drug coverage options is crucial. Consulting with a healthcare professional and exploring available resources can help patients navigate the evolving healthcare landscape.