CHE seminar - "Most Favored Nation" drug pricing restricts patient access in reference countries even when patients face no out-of-pocket costs

Event details

Abstract:

We show that manufacturers narrow covered patient populations to raise measured therapeutic benefit and the benchmark price, operating through coverage determination rather than cost-sharing. Calibrating to U.S.-OECD price differentials, MFN pricing yields 7.1% higher global therapeutic benefit but 17.8% lower manufacturer revenue. If the reference country renegotiates its pricing rule, both therapeutic benefit and revenue increase—but the reference country's health plan bears most of the cost.

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About the speaker

Luís Sá

Luís Sá is an Assistant Professor of Economics at the University of Porto, specializing in the industrial organization of healthcare markets, with a focus on the hospital and pharmaceutical industries. His work has been published repeatedly in the Journal of Health Economics. Before joining U. Porto, Luís was a Research Associate at Nova School of Business and Economics, where he contributed to the EU-funded HI-PRIX research consortium on pharmaceutical pricing and innovation. He holds a PhD in Economics from the University of Minho and completed a postdoctoral fellowship at NIPE, where he developed his research agenda on hospital competition and healthcare market dynamics. During his doctoral studies, he was a visiting researcher at the University of Oxford and the University of York. Luís has taught economics across undergraduate and graduate programs—to students in Economics, Management, Engineering, and Medicine—and more recently, in executive education. He serves as a referee for the Journal of Health Economics, is a board member of the Portuguese Health Economics Association, and previously served on the Early Career Committee of the European Health Economics Association.