Today I attended the very interesting ISPOR Health Policy Leadership Exchange (HPLE) in Washington DC on the topic of Most Favored Nation (MFN). There were a number of important points made and I\u2019ll summarize a few of them. <\/p>\n
First, US drug prices are much higher than in other OECD countries. An ASPE report from 2024<\/a> states that \u201cU.S. prices for brand drugs were at least 3.22 times as high as prices in the comparison countries\u201d<\/p>\n Second, the magnitude of the difference in drug prices between US and Europe is a relatively recent phenomenon. While the US has always paid more than other countries, prices have diverged more in recent decades. For instance, Berkemeier et al. (2019)<\/a> found that:<\/p>\n Before implementation in Germany of comparative effectiveness analysis and collective price negotiations [in 2011], net U.S. prices for physician-administered drugs averaged 29.2% higher (95% CI = 26.6%-31.7) than those in Germany. After implementation of comparative effectiveness assessments and price negotiations in 2011, the divergence between U.S. and German prices increased another 28.9% (95% CI = 23.7%-34.3%). <\/p>\n Third, some of the discussion focused on the objectives of the policy. A consensus view was that MFN would not dramatically reduce prices in the US (particularly out-of-pocket cost for patients), but the Trump administration would use MFN as a tool to get countries outside the US to pay their fair share toward global pharmaceutical R&D by raising reimbursement. The rationale for this is that pharmaceutical R&D is a global public good (see Frech et al. 2026<\/a>), which means additional reimbursement leads to more R&D investment. However, it\u2019s not clear to what extent MFN will result in increased prices outside the US more than to a marginal degree. <\/p>\n Fourth, if there remain large differences in reimbursement, a lot of discussion focused on what pharmaceutical companies are likely to do. One presenter claimed that pharmaceutical manufacturers are likely to use at least one of the three following strategies. <\/p>\n