Incubate Releases Statement on Proposed "Most Favored Nation" Model for Medicaid Drug Pricing

WASHINGTON (May 6) -- As Congress works to finalize its spending bill, reports are swirling that some Republicans are considering a "Most Favored Nation" approach for drug pricing in an effort to generate savings in the program. The move, which would peg the prices Medicaid pays for drugs to the prices paid in foreign countries, poses a direct threat to American leadership in biopharmaceutical innovation.

Incubate's executive director, John Stanford, issued the following statement:

"As the voice of life sciences venture capitalists, Incubate remains opposed to proposals to adopt foreign price controls under the guise of the "Most Favored Nation" drug pricing policy. Recent reports that the Trump administration seeks to incorporate such a scheme in Medicaid raise serious concerns that the United States is on a path toward weakening its global leadership in drug development.

"Since our founding, Incubate has educated policymakers on both sides of the aisle about the dangers of price controls as an anathema to investment -- and by extension -- new medicines. Price control mechanisms -- regardless of their form -- undermine the incentives that encourage investment in groundbreaking therapies and cures. "Most Favored Nation" models should not have a place in any federal healthcare program.

"We urge Congress to resist distractions that would further erode America's dominance in biopharmaceutical innovation."

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About Incubate

Incubate is a 501(c)(4) organization of venture capital firms representing the patient, corporate, and investment communities. Our primary aim is to educate policymakers on the role of venture capital in bringing promising treatments to patients in need.