Full Breakdown
U.S. Push for Most-Favoured-Nation Drug Pricing Raises Concerns Over European Access
By Drooid · · How we work
Core Event: U.S. MFN Pricing Initiative
In last May, President Donald Trump advanced a “most-favoured-nation” (MFN) pricing rule that would require U.S. drug prices to match the lowest prices set by a group of high-income reference countries, including Germany and France. A modelling study published in *The Lancet* examined 195 patented medicines accounting for $87.9 billion of U.S. annual drug spending. The authors warned that, for three-quarters of the medicines, the revenue loss companies would face in the United States could exceed their total sales in the reference markets, creating an incentive to postpone launches in those lower-priced countries.
Data & Statistics
- 195 medicines studied, representing $87.9 bn of U.S. spending.
- 75 % of the medicines could generate greater losses than total sales in reference countries.
- EU drug launches fell roughly 35 % in the ten months following the executive order, according to Reuters.
- Projected U.S. savings: $5.2 bn on hospital medicines and $6.4 bn on pharmacy purchases; broader application could raise these to $21 bn and $25.5 bn respectively.
- Seventeen companies have negotiated confidential exemptions, reducing the potential savings by about 71 %.
Official Statements & Responses
The European Commission, tasked by health ministers in mid-June, is assessing whether MFN pricing leads to delayed launches, higher prices, or reduced access, but notes that current data are insufficient to draw firm conclusions. Thomas Hwang, lead author of the study and physician at Brigham and Women’s Hospital, emphasized that while the policy could generate substantial U.S.
Industry and Policy Implications
Under updated EU pharmaceutical rules, a company must launch a new medicine within three years of a request or forfeit two years of monopoly rights, a measure intended to counteract possible delays but deemed unlikely to offset the overall impact. Analysts argue that without increased European spending, the MFN rule may shift launch strategies rather than deliver the projected savings.
Verbatim Quotes
- “The risk is very concrete: if pharmaceutical companies delay launching medicines in Europe because European prices may be used to determine prices in the United States, patients here could wait longer for treatments that are already available elsewhere,” — European Patients Forum
- “It's true that even in bigger countries like Germany, we see companies reconsidering whether they launch or when they launch,” — Alexander Natz, chief of biotech entrepreneurs' lobby Eucope
- “Referenced countries, from Germany to Japan to Australia, are facing substantial pressure from the US administration and industry to raise prices and spending on medicines,” — Thomas Hwang, of Brigham and Women’s Hospital and lead author of the study
- “I understand the commission study that it basically says it's too early to really benchmark individual prices. So far, so good. Maybe that's true. But the implications are much wider,” — Alexander Natz, chief of biotech entrepreneurs' lobby Eucope