What MFN Would Cost Illinois

What MFN Would Cost Illinois

by John Conrad | May 13, 2026 | Policy News

As Congress debates Most Favored Nation (MFN) drug pricing - a policy that would peg Medicare drug prices to rates paid in other high-income countries - two new reports put the stakes in sharp relief. The picture for patients and for Illinois is not a good one.

A new PhRMA report, Access to New Medicines in the United States vs. Other High-Income Countries, examined patient access to 477 new medicines launched globally over the past decade across the U.S. and 19 other high-income countries - the same countries that would set Medicare drug prices under MFN. Patients in those countries have access to just 36% of new medicines compared to 88% in the United States, and wait nearly three years for access to new treatments versus an average of three months here.  The gap holds across every major therapy area - cancer, chronic disease, and rare disease alike.

Those countries aren't simply paying less for the same drugs. Many foreign governments benchmark new medicine prices against older, inferior treatments and apply outdated metrics like quality-adjusted life years (QALYs) that systematically discriminate against older or sicker patients.  The result is blocked access, not just lower prices - and MFN would import that dynamic directly into the American system.

The economic consequences for Illinois would follow quickly. A 2025 analysis by Vital Transformation modeled MFN's impact on jobs, earnings, and state budgets over a 10-year period. Illinois would lose more than 81,000 biopharmaceutical jobs - over 17,000 directly employed and nearly 64,000 in indirect employment across the broader economy.  The earnings impact would exceed $16.7 billion, with more than $4.7 billion in combined state and federal tax revenue lost over the decade.  That ranks Illinois seventh among all states in projected job losses.

Those cuts would not stay contained to Medicare. MFN prices would spill over into Medicaid, 340B, and hospital Average Sales Price payments, accounting for more than 635,000 of the total jobs lost nationally.  For Illinois hospitals and community oncology clinics, the ASP impact is especially acute. The 6% margin built into Medicare's ASP+6 payment formula is often the difference between profit and loss for independent and rural treatment centers  - facilities that serve patients well outside major metro areas.

The innovation pipeline faces equal exposure. A price reduction of the magnitude MFN requires would be expected to eliminate nearly all venture capital funding for early- and late-stage biopharma companies and reduce authorized biopharmaceutical patents by 48%.  For Illinois startups dependent on VC to reach clinical development, that is an existential threat.

Illinois has spent years building a life sciences ecosystem that generates jobs, attracts capital, and delivers treatments to patients. MFN would put all three at risk simultaneously. iBIO urges Illinois' congressional delegation to carefully weigh what this policy would cost the state before moving forward.