MFN Drug Pricing: What Pharmaceutical Manufacturers Need to Know About Their International Agreements

In this episode of Inside Litigation, Sam Lonergan cuts to what matters: if your existing contracts were written before MFN was a consideration, the executive order on drug pricing may have just made the terms of those deals lacking and/or counterproductive — whether you know it or not.

According to Lonergan, an early assessment tends to create opportunities, whereas waiting on issues like this tends to create consequences.

Are your international agreements keeping pace with the MFN regime? If not, now is the time to find out.

Inside Litigation is our video series of brief insights into timely topics from our litigators.

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Key Takeaways

• Most Favored Nation (MFN) drug pricing ties U.S. pharmaceutical prices to lower international prices, creating new compliance obligations for manufacturers with international co-promote, distribution, or royalty agreements.
• Existing agreements may not give manufacturers adequate access to international sales data or influence over international launch decisions — both of which manufacturers now need.
• Commercially reasonable efforts clauses — standard in many co-promote and distribution deals — may now directly conflict with broader revenue goals.
• Arnold & Porter has developed a framework for addressing MFN-related contract deficiencies, including approaches that leverage existing contract terms and applicable equitable doctrines.