At this year’s World Health Summit, OHE brought together an expert panel to discuss the impact of MFN on the global healthcare landscape and strategies to protect sustainable innovation.
Key Takeaways
- Measuring MFN’s early global impact is challenging with current data, but very early indications show access delays in Europe
- Industry players, investors, payers, and policymakers are all reacting at different speeds
- LMICs are facing risks, but also opportunities
- Deciding and agreeing on what fair distribution of innovation costs means is complex
- Europe’s response is risking competitive weakness
Nearly 18 months have passed since President Trump signed Executive Order 14297 in a bid to reduce the price of prescription drugs in the US whilst increasing them internationally in comparable high-income countries. Since then, this so-called Most-Favoured Nation (MFN) pricing policy has dominated discussions around global pharmaceutical innovation, affordability, and access.
The Trump Administration believes the rest of the world are “freeloading” when it comes to contributions to global pharmaceutical research and development internationally. The MFN pricing model proposes to tie US drug prices to the second-lowest price paid by other comparable reference nations. This policy aims to both bring down domestic drug prices and increase international ones through various trade mechanisms, including tariffs and Section 232 investigations.
As the global implications of MFN continue to unfold, drugmakers and policymakers are left to manage significant uncertainty around the policy’s enactment, the consequences for countries that fall within the proposed price index and those outside of it, and to develop strategies to protect sustainable innovation ahead and equitable access to treatment for patients.
With these challenges in mind, OHE convened an expert cross-sector panel at the recent World Health Summit to explore the new pharmaceutical innovation landscape outside of the US reshaped by MFN.
Moderated by OHE’s Chief Executive Graham Cookson, our panellists included senior leaders from across the global health ecosystem sharing key insights on MFN’s impact on pricing negotiations, patient access, the life sciences industry, and multilateral institutions globally, specifically outside of the US. We were pleased to welcome and hear from:
- Dr. Jayasree Iyer, CEO, Access to Medicine Foundation
- Dr. Samantha Roberts, Executive Partner, Syncona Investment Management Ltd
- Francesca Colombo, Head of the Health Division, OECD
- Dr. Claus Runge, SVP, Global Head of Public Affairs, Sustainability & Internal Engagement, Bayer
- Matthias Hofer, Senior Principal Economist, OHE
The following is an overview of the discussion and the key insights provided by the panel.
Measuring MFN’s global impact on medicine prices and access is tricky with current data
Given the recency of MFN implementation and the limited data from healthcare systems and pharmaceutical markets, the panel largely agreed that drawing conclusions regarding MFN’s impact on the pricing and access to pharmaceuticals outside of the US was challenging. However, from the perspective of pharmaceutical industry, there have been clear early signals towards reducing drug prices in the US and moving investment into the US.
Matthias presented findings from the OHE’s latest Change Initiative study which indicates signals for growing hesitancy from pharmaceutical companies to launch products outside of the US. This research cited observations on product withdrawals and launch delays from European nations and an analysis of GlobalData’s price intelligence database that shows launches in Europe fell by 35% in the ten months following the MFN announcement, suggesting the policy has already started to impact market access. However, Sam pointed out that IQVIA data published in July this year suggest this decline began before MFN, so whether such a shift is due to MFN is hard to determine.
Francesca discussed the challenges of evidencing the impact of MFN on drug pricing as data sources are scarce and net prices are often hidden through confidential rebates. In terms of pharmaceutical spending at national level, data from eight OECD countries showed reductions in the growth rate of spending over 2025, indicating that MFN may already impact policy decisions, but again the evidence is far from concrete.
Different stakeholders are reacting at different speeds
Another critical takeaway from the panellists was the difference between industry, investors, and policymakers in their reactions to MFN reform.
Speaking from his experience at Bayer, Claus stated that pharmaceutical companies are already shifting their investment into the US as a response to MFN policies. Claus saw the EU as inactive in its approach, risking not only patient access to innovative treatments, but threatening the pharmaceutical sector and industrial competitiveness. Jayasree also stated that, according to research from the Access to Medicine Foundation, around 15 of the largest 20 companies have invested billions in shoring up US manufacturing.
From a financial investor perspective, Sam observed that investors are cutting through the policy noise as their investments often concern companies entering the market in ten-years’ time, and as such are not yet disregarding revenues from ex-US markets like the EU. However, their investment strategy is increasingly shifting toward later-stage opportunities, with a focus on products that demonstrate strong return potential based on their mechanism of action, clinical development progress, target patient populations, and level of unmet medical need.
Regarding the response of policymakers, Claus highlighted an ‘unalertness’ from policymakers, especially within the EU, to addressing the risks posed by MFN to the healthcare system, pharmaceutical markets, and industrial competitiveness.
LMICs are facing risks, but also opportunities
The panel also explored the impact of MFN beyond developed nations and looked at the potential impacts for low-and-middle income countries (LMICs). As the panel discussed whether MFN would increase the importance nation’s bargaining power over patient need in negotiations, Jayasree warned that this can already be seen as LMICs often pay higher real prices for drugs than developed nations. She also pointed to a concerning trend of pharmaceutical industry with strategic focus in Africa retracting their commercial operations, resulting in thousands of products being deregistered in the continent. As a result, African countries are unable to start producing necessary product to the scale of those missing, they are instead importing finished products with associated risks regarding supply chains and access delays.
Conversely, there was also a degree of optimism from the panellists towards the opportunities for LMICs. Emerging markets currently account for 20-30% of revenue for large pharmaceutical companies, and this is likely to expand and produce inventive business strategies, such as new pricing models offering products at cost to anchor price to patient need, or hybrid models working between this approach and tiered pricing, as Jayasree suggested. Claus supported this view, suggesting that LMICs could become a means for pharmaceutical industry to compensate for losses in revenue from MFN reference countries, and spoke about Sub-Saharan Africa as a significant region for Bayer and their social impact work. Jayasree also spoke about the increasing importance of China in LMICs, as new licensing agreements with Chinese, Indian, and Korean companies show countries are looking for alternative sources of financial investment to support research and development, though currently these agreements are mostly limited to generics and legacy products, so the impact on innovation is too early to determine.
Deciding what fair distribution of innovation costs means is complex
The idea that the US has been paying more than their ‘fair share’ for pharmaceutical innovation is not a new concept, but the introduction of MFN raises the question of what fair distribution would look like. Francesca spoke about the complexity of this issue because it requires countries to agree on what successful innovation is and the total amount of innovation spending. However, the criteria for budget allocation and what are considered “true innovation” are varying between countries. For example, HTA agencies in France and Germany assess half of new pharmaceuticals as having no significant additional clinical benefit over existing treatments. Hence, Francesca suggested that it will be challenging to reach any agreement on what a fair distribution of innovations costs looks like post-MFN, or which potential mechanisms would enforce it.
Europe is risking competitive weakness
Faced with the challenges of protecting access and innovation in the wake of MFN, Claus stated that Europe is at a crossroads relating to access, between securing access to generics and fostering innovation. For example, the Critical Medicines Act endorsed by the EU parliament is aimed at reducing the region’s dependencies on China and India for generic medicines. Whilst this act may strengthen European supply chains, Claus believes that Europe need to take more urgent policy action to protect innovation to remain a competitive market. To preserve a future where sustainable and equitable innovation is accessible in Europe, policymakers need to act faster and for example remove growing access barriers amid EU member state difference in reimbursement policies.
Conclusions
Graham brought the panel to a close outlining the risks and the opportunities in a post-MFN landscape which our experts brought to the table. MFN certainly poses risks to both reference price countries and LMICs regarding affordability and lost product launches. Despite this, there may also be opportunities for novel policies and business strategies to safeguard access to protect future innovation. However, how the pharmaceutical landscape will shift post-MFN remains unclear, especially given the current lack of clear evidence.
What is certain from the panellists is the need for action from policymakers to consolidate their positions and create mechanisms and mitigation strategies to deal with the consequences of MFN. Graham suggested that policymakers may be displaying a ‘watch and wait’ approach but argued that the lack of good data both before MFN’s announcement and since means the view of the situation is messy and complex and there is little value in waiting to see what happens before making any decisions.
From Washington to the World
The Change Initiative is a multi-stakeholder international forum that brings together leading organisations across industry, academia, and civil society to leverage their collective expertise. Building on research within the Change Initiative’s US Policy Horizon Series, this session moved the conversation beyond the US alone to explore the policy’s broader implications for global equity, bargaining power, and access, as well as propose practical, forward-looking mechanisms to protect sustainability and equity in the innovation ecosystem.
