Significant Changes in Healthcare: Regulations in Law

The pharmaceutical industry is experiencing a wave of regulatory changes in 2025 that will significantly impact manufacturers, payers, providers, and patients alike. At Archbow Consulting, we are committed to keeping our clients informed as new information and regulatory guidance become available. In this blog, we examine two of the most important recent developments poised to reshape pharma strategy and patient access.

1. The Executive Order on MFN Pricing & Push for DTC Channels

In May 2025, the White House announced a sweeping Executive Order establishing a Most Favored Nation (MFN) pricing model for prescription drugs. The MFN policy aims to benchmark U.S. drug prices to those paid in other developed countries. The order also signals strong support for Direct-to-Consumer (DTC) channels, encouraging manufacturers to explore new models for patient engagement and distribution. For a more in-depth look, refer to our recent blog post here.

These changes mean manufacturers must recalibrate pricing strategies, supply chains, and patient support programs—potentially accelerating the evolution of DTC models and digital health platforms to maintain market presence and patient access.

2. Government-Mandated Changes to Fair Market Value Methodology

In parallel, the Centers for Medicare & Medicaid Services (CMS) is finalizing a rulemaking on a new methodology for determining Fair Market Value (FMV) within the pharma industry. The proposed approach, slated for enforcement by year-end, prioritizes transparency and standardized assessments for service agreements between manufacturers and third-party vendors, including hub services, distributors, and specialty pharmacies.

The CMS is regulating how pharmaceutical manufacturers determine and report Bona Fide Service Fees (BFSFs) for Average Sales Price (ASP) calculations. Recent guidance clarified that BFSFs can only be excluded from price concessions if they truly reflect fair market value (FMV) and are paid for specific, legitimate services.

• For fees not directly tied to drug volume or price, FMV may be established using comparable market transactions or by calculating the service cost plus a reasonable markup.
• For fees that do vary with the amount of drug sold or its price, including percentage-based or fixed fees, FMV must be based on actual service cost plus a markup.
• If material cost data isn’t available, manufacturers are expected to use verifiable market data to determine FMV.

For pharma companies, this means re-evaluating existing contracts, compensation structures, and compliance protocols to ensure alignment with the new FMV standards. Although the rule is not yet finalized, the deadline is approaching quickly, and proactive preparation is essential.

Where Do These Changes Intersect?

Both initiatives aim to drive greater transparency and cost control in the pharmaceutical supply chain. The intersection of MFN pricing and the updated FMV methodology creates a complex environment for manufacturers, as pricing decisions will be scrutinized under both international benchmarks and new domestic compensation guidelines.

For Archbow’s client base, this convergence means increased scrutiny of every facet of pricing and contracting. Manufacturers and channel partners must work closely together to avoid compliance pitfalls while still achieving their business objectives. The evolving regulatory environment also underscores the importance of agile, informed strategies—especially as DTC models blur the traditional lines between manufacturers, payers, and patients.

What’s Next?

While the FMV rule is not yet finalized, regulatory momentum suggests change is imminent. At Archbow Consulting, we are closely monitoring every update and stand ready to help our clients navigate these shifts with clarity and confidence.

If you have questions about how these regulatory changes may affect your business or need assistance in adapting your strategies, please contact our team today. Subscribe to our blog or follow us on LinkedIn for the latest insights and practical guidance as the situation evolves. Let Archbow Consulting be your trusted partner in this time of transformation.