Earlier this year, when the administration proposed deep cuts to the National Institutes of Health, lawmakers from both parties swiftly and rightly pushed back. Slashing medical research funding, they recognized, would jeopardize the discovery of breakthrough treatments that patients desperately need.
The NIH plays a crucial role in supporting basic biomedical research. In 2024, it awarded $37 billion in grants to scientists nationwide. Lawmakers understood that undermining this investment in the name of budget savings could ultimately slow progress against the most pressing diseases.
That’s why it’s baffling that many of the same lawmakers who voted to protect NIH funding are now cheering President Trump’s plan to impose “most favored nation†price controls on drugs, a policy that could cause greater harm to innovation.
At first glance, MFN may sound reasonable. It would link U.S. drug prices to the lowest prices paid in other wealthy countries. Supporters argue this would bring down prices at home and encourage drugmakers to raise prices abroad, easing the burden on American patients who pay more than their international counterparts. It’s fair to expect other nations to contribute more.
However, MFN pricing wouldn’t force other countries to pay more. In most overseas markets, governments set drug prices unilaterally. Companies can’t simply raise them. Instead of leveling the playing field, MFN would slash revenues for pharmaceutical manufacturers in their largest market, with no way to recover those losses.
Faced with steep U.S. revenue declines, drugmakers would have no choice but to cut spending. Research and development would be among the first targets.
That would be a significant blow to innovation. While NIH funding is critical, the private sector provides most of the investment needed to bring new medicines to market — more than $2 billion per new drug, on average. In 2024, pharmaceutical companies spent nearly $288 billion on research and development, more than six times the NIH budget and 16 times the value of the proposed NIH cuts.
MFN pricing could shrink that investment dramatically. According to a University of Chicago study, MFN-style price controls could lead to a 60% reduction in drug research and development over the next 18 years, resulting in more than 340 fewer drugs reaching the market.
That loss would be devastating — especially given the enormous health challenges we face. In 2024, one in three deaths in the United States was caused by heart disease or stroke. More than 38 million Americans had diabetes. Obesity affected 42% of adults. Alzheimer’s deaths rose 141% between 2000 and 2021. And every year, 1.7 million Americans are diagnosed with cancer.
Breakthroughs in treatment could save lives and reduce suffering on a massive scale. They could also help curb healthcare spending: chronic diseases account for 90% of U.S. health costs. Investing in innovation today is one of the smartest ways to improve both public health and economic sustainability tomorrow.
Lawmakers were right to question NIH budget cuts that would have put future cures at risk. At a recent Senate hearing, a senior member observed: “If research is underway, you at least have the hope that maybe there’ll be a cure, maybe in the lifetime of someone. How can you walk away from that?â€
Lawmakers should take the same stance on MFN pricing. It poses an even greater threat by undermining the private investment essential to drug development.
If policymakers are serious about protecting patients and promoting medical progress, they must resist the allure of MFN and pursue more thoughtful reforms, ones that lower costs without sacrificing innovation.
Dan Crippen is a former director of the Congressional Budget Office. He wrote this for InsideSources.com.
