Before Washington Acts on Drug Pricing, It Should Take a Look at the Data

Sep 2

3 min read

A guest perspective by Adam Gluck, Head, U.S. and Specialty Care Corporate Affairs, Sanofi

Washington is debating whether to adopt most-favored-nation pricing — a policy that would tie Medicare payment rates for medicines to the lower prices set by foreign governments. It's an approach that deserves careful scrutiny, because the data reveals a more complicated picture than its proponents suggest.

Sanofi believes transparency is a precondition for good policy. That's why, earlier this year, we published our tenth annual Pricing Principles Report: a public accounting of how we price our medicines and what the numbers reveal about the system patients must navigate. What those numbers show is that the affordability crisis facing American patients is real, but its causes lie in a supply chain that systematically captures savings before they reach the pharmacy counter. MFN pricing does nothing to fix that. In fact, it makes things worse.

What a Decade of Data Reveals

Our 2025 numbers tell a clear story:

Sanofi paid 39% of our gross sales back into the supply chain as rebates — including $9.9 billion to PBMs and health plans, and $6.2 billion in mandatory rebates to government payors.
Fees paid on top of those negotiated rebates within our specialty medicines portfolio increased 23% year-over-year.
Meanwhile, our average aggregate net price — the amount we actually receive for our medicines — decreased 3.4%.

In other words: Sanofi's net prices are falling, while the fees and rebates extracted by middlemen are rising. Patients, caught in the middle, continue to face rising out-of-pocket costs at the pharmacy counter. When a patient fills a prescription, their insurer collects a rebate and the PBM earns a fee – neither of which is required to be shared with the patient. Three consolidated insurer entities cover 80% of American lives — and 50 cents of every dollar spent on brand medicines flows to insurers, PBMs, hospitals, and other intermediaries.

That is the real affordability problem. And it is one that price controls cannot solve.

MFN: The Wrong Move on Affordability

MFN pricing imports foreign price ceilings — set by governments in markets that routinely restrict and delay patient access to innovative therapies — and applies them to American patients without requiring that a single dollar of savings reach those patients. In fact, CMS's own projections show that the agency’s proposal to implement MFN in Medicare Part D, would actually increase costs for beneficiaries by $3.6 billion through higher premiums and out-of-pocket expenses.

The innovation consequences are just as stark. Independent research projects that MFN-based models would prevent 210 new drug approvals and 290 additional post-approval indications over the next decade — 500 fewer medicines for patients who are waiting. These aren't hypothetical future drugs. Many are follow-on indications of existing medicines: treatments for severe diseases, rare conditions, and therapeutic areas with no approved therapies at all. They are precisely the breakthroughs that price controls deter before they ever reach patients.

A decade of Sanofi pricing data points us toward a better set of solutions: require that manufacturer rebates be shared with patients to lower out-of-pocket costs at the pharmacy; ensure PBM fees aren’t tied to drug list prices, and restore transparency and accountability to the 340B program. These are reforms that address the system as it actually works — not as Washington imagines it works.

We at Sanofi strongly believe that better-informed conversations lead to better policy – countless patients’ access to care depends on Washington to get it right.

There is an opportunity to lower costs and protect the innovation ecosystem that produces the next generation of cures. The data shows the path. We owe it to patients to follow it.