A quarter of Florida adults — more than 4 million people — live with arthritis. Almost everyone in Orlando knows someone coping with swollen joints, chronic pain or the fear of losing mobility.
At Bay Arthritis Institute, we see their struggles every day: patients with autoimmune diseases like rheumatoid arthritis rely on clinics like ours to manage their conditions.
But now, a new drug pricing plan debated in Washington — the Most Favored Nation (MFN) model — would upend their care.
In theory, it promises to lower drug costs by tying U.S. prices to those set in foreign countries. In practice, it would slash the payments small, private practices receive from both Medicare as well as private insurers. Many clinics would no longer be able to stock and administer certain medicines, and some could go out of business entirely, leaving patients across Central Florida with fewer treatment options.
Right now, small, private practices like Bay Arthritis buy medications up front and get reimbursed once the medication is administered, a model known as “buy-and-bill.” Medicare Part B ties drug reimbursement to the Average Sales Price (ASP) and providers receive a 6% add-on to help cover overhead costs. Most private insurers also use ASP to reimburse for this essential care.
Six percent may sound sufficient, but in reality, those margins are really slim and barely cover costs that keep our clinic up and running. In fact, for some medicines, the reimbursement doesn’t even cover what clinics like ours actually pay to acquire them.
But if we change the system to a Most Favored Nation pricing model, those margins would completely collapse. By importing artificially low drug prices from Europe, an MFN scheme would reduce the total dollar value of the 6% add-on reimbursement that clinics receive.
After accounting for the expense of the drug itself, the clinic’s actual revenue per treatment administered could plummet by half — even though rent, labor, and other operating expenses would stay steady.
This means our clinic may actually have to foot the bill for administering these drugs instead of relying on Medicare and private insurance companies to do what they’re supposed to do: cover patients’ health-care expenses. No business can operate at a constant loss, especially those providing essential treatments to our most vulnerable patients.
Instead, many clinics would be unable to afford to stock and provide certain medicines, forcing more patients to seek care elsewhere. And “elsewhere” often means hospital outpatient departments, which are often farther away from the patient’s home. Hospital infusions are also more expensive and carry greater risks for immunocompromised patients. During flu season, my patients would rather come to their local clinic than a crowded hospital ward. But if MFN goes forward, many won’t have a choice.
We’re not just catastrophizing a worst-case scenario. In 2020, the Centers for Medicare and Medicaid Services analyzed a similar MFN model and admitted that some of the projected government savings came from assuming people would forgo treatment. For a patient with arthritis, skipping an infusion doesn’t save money — it risks debilitating pain and irreparable joint damage.
The stakes in Central Florida are especially high. Clinics in the region serve a disproportionately older population, as well as active and retired servicemen and women from various military branches. In Lake County, for example, over 26% of the population was aged 65 or older between 2019 and 2023, compared to about 17% nationally. Many patients live in outlying areas such as Lake and Osceola counties, where traveling to Orlando or Tampa for care is simply not realistic. If even one or two small, private practices close their doors because they can’t absorb MFN’s cuts, hundreds of patients will be stranded.
Lowering drug costs is a goal we all share — lawmakers, providers, and patients alike. But importing price caps from foreign health systems isn’t the way to do it. There are better paths forward that won’t lead to missed treatments, sicker patients and higher long-term costs.
We need Florida’s congressional delegation to push back against the MFN model and instead work with providers to offer meaningful solutions that have a proven track record of reducing costs without putting life-changing treatments out of reach.
Andre Smith is the Chief Operations Officer of Florida’s Bay Arthritis Institute.
