Convergence of US FDA & Drug Pricing

FDA Wants to Play a Role in Drug Pricing

Serendipity…recent developments regarding the US FDA & Government drug pricing polices coincide with the launch of our new firm, MOMENTUS  Biopharma Consulting. 

MOMENTUS  launched with the conviction that helping biopharma executives integrate their value strategy planning with both Regulators & Payers in mind will pave a more certain path to commercial success, and more importantly, speedier access to essential medicines for patients in need.

It is serendipitous as the new Head of FDA, Marty Makary, has taken an unprecedented position regarding the FDA’s role in drug pricing and prioritization of meaningful new medicines. [See ENDPOINTS News – November 6, 2025].  Mr. Makary and his administration colleagues are doing things never thought of as possible in the US system.

Per ENDPOINTS News, the administration is “challenging previously held assumptions”. The traditional system was forever one of norms that were not to be breached, even if some previous administrations could have tried.  The norm has been to keep the FDA drug approval decision as a separate, 1^st Hurdle, void of economic concerns, and let Payers address price and access as Hurdle #2.  This model may be on the verge of being dismantled. 

Two Key Administration Health Policies Converging

At the heart of this change is the Commissioner’s National Priority Voucher (CNPV) program, a pilot that would allow the FDA to sharply cut review times for drugs hand-picked by the FDA.

In conjunction you have the Most Favored Nation (MFN) rule coming into play where manufacturers are being pressured to provide pricing that aligns with their drug prices in other wealthy but price-controlled health systems like Germany and France.

The FDA under Makary has openly stated it may pick drugs for the new voucher program that “lower the US price of a drug or drugs consistent with MFN pricing or reduces other downstream medical utilization to lower overall healthcare costs.”

The first two waves of Priority Voucher awards clearly included pricing and economics, notably in the case of yet to be approved oral obesity brands.  And the recent MFN deals, highlighted by last week’s obesity brands from Lilly and Novo, are breaking new bounds in how the US government influences prices. 

This new approach will not just impact US Government drug programs like Medicare and Medicaid, these price deals will become the reference to which all commercial payers can now negotiate.

Rather than comment on the durability of FDA legality and legislative barriers to these boundary breaking ideas, we want to take a moment to ponder what opening this Pandora’s Box is signaling about the future of US biopharma pricing and value – even if the FDA retreats to its traditional, non-economic remit.

Just a Political Environment Blip or Long-Term Warning Signal?

Thes latest events in our view could have more impact on biopharma valuations than other pricing reforms in the past few years. 

Wall Street and big pharma executives have been lamenting the doom of biopharma since the implementation of the IRA Medicare Price Negotiation rule a few years back.  This enables Medicare to negotiate prices for select brands after ~11 years post FDA approval. We at MOMENTUS  were not as pessimistic given that Medicare Part D insurers have been able to negotiate rebate discounts since day 1, so the new IRA negotiations have not materially moved the net price needle as much as many think.  Wall Street is aware of this, and their concerns are more related to the loss of long-range price control and lifecycle optimization of medicines, and an overall loss of development incentives to invest in some therapeutic areas.

Today, FDA vouchers are blending with the MFN mandate to create unprecedented, government-controlled pricing from day 1 of new drug approval.  The most compelling example is Lilly’s new oral GLP1 – orforglipron – which was recently awarded a Priority Voucher, and the molecule has been included in the MFN deal set last week where new anti-obesity orals will be priced down to as low as $150 for starting doses (Please see the Obesity MFN Deal Price Table below).  Only a few months back, experts assumed Lilly would list price orforglipron near their franchise counterpart ZEPBOUND (~$1,100) and play the gross-to-net (GTN) price game, segmenting the fragmented US market by price in a traditionally calculated fashion.  After all, orforglipron is an innovative molecule that has undergone its own rigorous and expensive clinical trials testing.

MFN Deal for Obesity Brands – Published Nov 6, 2025

The new prices are better than what the companies have offered on their own cash-pay sites

Note: Medicare beneficiaries would pay $50 co-pay. * Zepbound and orforglipron $346 price is an average across different doses.
Source: Trump administration, company websites.

In conclusion, the latest US government price experiments as part of FDA Priority Vouchers and MFN Pricing signal a shift to US government-controlled pricing pressure becoming the norm from Day 1 of FDA approval for novel therapies.

Let’s Consider an Additional Illustration – Smoking Cessation

To further speculate on the downstream implications of merging FDA and pricing, consider an area MOMENTUS  have worked in recently — Smoking Cessation.  A novel therapy cytisinicline is under review by the FDA for smoking cessation and was recently awarded a Priority Voucher.

Cytisinicline is a novel molecule approach that is like CHANTIX (varenicline) that offers some possible profile advantages, especially tolerability.  Smoking continues to be a major public health issue and driver of significant costs and quality of life issues.  It is hard to argue against considering rapid access for novel treatments in this area.

We should note there has been no mention that pricing and economics will be brought into the evaluation and Priority Voucher process for Cytisinicline.  But we want to pose some hypotheticals.

The US Health Technology Assessment (HTA) body ICER has conducted an assessment of cytisinicline, and has assumed a list price of $5,000 for a course to quit smoking.  The first line generic options – including generic CHANTIX/varenicline – cost less than $300 per course. Additionally, OTC nicotine replacement options are very low cost.

Consider the traditional path to uptake for a new medicine like cytisinicline — the FDA does its job to assess efficacy and safety, interrogates whether cytisinicline offers an appropriate benefit vs risk profile.  If approved, the makers of cytisinicline are free to set any list price they want and then focus on payer coverage and access, one segment and payer at a time.

Smokers motivated to quit may come from Medicare, Medicaid and Private or Commercial payers, so all payer groups must be engaged.  And rebates-discounts to list price may be considered selectively (PBMs and Health Plans).  Medicare Part D access would be important as many smokers are over 65 years of age and facing serious consequences like COPD and Cardiovascular disease.

A traditional path usually starts with a higher value-based list price and gradual uptake.  A new product coming into a generic category will often have to accept positioning after generics first.  In addition, burdensome prior authorizations are likely to slow down enthusiasm among prescribers. So robust uptake can take years.  But the price-access equation at higher list pricing may still be optimal versus pushing low price and high volume from the start.

What if the new FDA and the makers of cytisinicline were to discuss a deal as the priority review comes to the table?  Could price be a factor?

Are There any Upsides to Agreeing to Pricing?  

Aside from rapid regulator review and commercial market access, maybe this creates an unprecedented opportunity to gain immediate preferred and broad payer access in Medicaid and Medicare from day one?  And perhaps government access influences commercial payer policies? The makers of cytisinicline are a small-sized biopharma and don’t have the resources for the long value road that a big pharma organization may embrace.  So why not make a deal?

What are the Downsides?

The makers of cytisinicline could end up with a regrettable price from Day 1.  How do you argue the proper price in a system with no rules for assessing value relative to alternatives?  Will the administration decide how to negotiate in a back room?  What if they feel a 50% premium to generic CHANTIX/varenicline is their best offer?  ICER assumed a far higher price.  $500 is one tenth of $5,000.

Assuming deals are publicly shared like recent deals in obesity, how can the cytisinicline payer account team negotiate a price any higher for private health insured patients?  

And what if getting open access and listing with US Government doesn’t translate to volume right away?  What if physicians and patients are cautious, and continue to use the traditional therapies first?

What about shortcuts and safety? In trying to get a good deal for the health system, what if the FDA cannot fully assess safety needs and scenarios?  A one-day, “tumor board style” review may leave the drug maker with post launch safety issues that become more of a hassle than if full review path were taken.

What Is a Biotech Executive to Do?

As a baseline, biopharma executives should closely monitor these policy events and consider participating in industry group efforts to lobby and shape the administration’s efforts.

Another effort that certainly falls within the biopharma developer’s control is to install processes that ensure their pivotal/registrational trials are pushing the boundaries of meaningful clinical value and benefit for HCPs, patients and payers.

Regulators like the FDA are focused on trials that can prove a solid benefit:risk ratio, sometimes regardless of whether the trial endpoints are meaningful in clinical practice, or to patients and a payers.  Surrogate biomarker endpoints are often the best path to regulatory approval. Other secondary clinical outcome endpoints skip statistical rigor.

In this new world, drug makers and the FDA may have to do more to fully understand the additional benefit and value of new medicines.  Maybe the FDA will not change overnight, but the Biopharma Development Team can set the tone and push for trials that will provide meaningful value vs alternatives so that US government deal-makers are negotiating with fewer cards. 

Drug makers seeking trial design scientific advice from Regulators and Payers has been happening for years in Europe through early scientific advice pathways.  There has been speculation among experts that the US FDA has considered seeking Advisory Committee advice at the point of End-of-Phase 2 and Ph3/registrational trial design.  Should the FDA continue down this path, it would be dangerous for biopharma’s not to engage early and often.

It is time for biopharma’s CEOs to drive greater collaboration early in drug development across their often-siloed teams – Regulatory, Clinical Development, Commercial and Market Access/HEOR.  A Regulatory team planning their End of Phase 2 strategy may not fully consider near market commercial and payer realities.  Regulatory departments are experts in understanding how to deal with the FDA. But the FDA may now be changing, and the Regulatory team’s past track record may not be the key driver of strategy. The time is ripe for new ideas and approaches on the biopharma side.  Regulatory needs to embrace clinical development and regulatory body engagement strategies that factor scenarios of this new world where value and economics cannot be ignored in their processes.