Most-Favoured-Nation
Drug Pricing.

Executive summary.

In May 2025 the White House ordered that Americans should pay no more for new medicines than the lowest price charged in comparably wealthy countries: the "most-favoured-nation" (MFN) price.¹ Eighteen months later, that single premise has produced pressure letters to 17 of the world's biggest drugmakers,² all of whom cut a deal,³ a 100% tariff on patented medicines that takes effect within days of this report's publication,⁴ three CMS pricing models that import international reference pricing into Medicaid and Medicare,^5,6,7 a direct-to-consumer platform,⁸ a trade investigation into an allied government's drug-pricing system,⁹ and the first measurable evidence that companies are delaying or abandoning European launches in response.¹⁰

While Trump is best known for his aggressive tariff policies, big pharma is much more shocked by his recent moves to introduce net-price referencing. Every previous international reference pricing system in the world has referenced list prices. The US models require manufacturers to report true net prices, including confidential discounts, clawbacks, and managed-entry agreements.⁵ Under that rule, a discount conceded in Germany or France no longer stays on the European continent. Instead, it can reprice the manufacturer's largest and most profitable market in future launches. The additive-revenue logic that made European launches the default strategy for big pharma for half a century is now gone. The launch data show companies acting on that arithmetic already.¹⁰

Europe's response makes the collision worse, not better. The EU's revised pharmaceutical legislation, expected in the Official Journal around October 2026, introduces a launch obligation (Article 56a) that can strip market protection from companies that fail to serve a member state within three years of a request.¹² Brussels is making European launches compulsory at the exact moment Washington is making them expensive. And behind both, China has become the world's most prolific source of new medicines, ready to fill any vacuum the standoff creates.¹³

The one-sentence version

MFN turns every European price concession into a US pricing liability, which makes Europe's slow, low-priced markets rational to skip. The EU's counter-move punishes skipping, and China stands ready to sell into whatever space is left.

The conversation behind this report 🐇🕳️

This report grew out of a long conversation on The Pharma Perspective with Neil Grubert, one of the most followed independent voices in global market access, recorded in July 2026.¹⁴ My conversation with Neil incentivised me to go down the MFN rabbit hole. I set out with the goal of creating the most comprehensive report on this elusive policy, which has the potential to reshape the operating model of the pharmaceutical industry. The report is free to download, and will be updated as new information becomes available. Where a claim rests on Neil's reading of events rather than a published document, it is attributed to him directly. Everything else is referenced to primary sources.

The Pharma Perspective MFN, Europe's complacency problem, and China — with Neil Grubert. The full conversation this report is built on: how the deals were constructed, why net-price referencing unsettles the industry, and what "a certain level of complacency in Europe" really means. Video not loading? Watch it on YouTube →

Featured expert

Neil Grubert

Neil is an independent global market access and policy consultant with over 25 years in the field. He built the market access business at Decision Resources Group (now Clarivate) before going independent in 2014; today one of the most widely read commentators on pricing and access, posting daily analysis to a large LinkedIn following.

Follow Neil on LinkedIn

What is “Most-Favored-Nation” pricing?

"Most-favored-nation" pricing (or “most-favoured-nation” for my UK readers) borrows its name from trade law: the idea that the United States should automatically receive the best price a manufacturer grants to any comparable country. The policy's premise is that the US pays several times European list prices for new patented medicines (while enjoying highly competitive generic prices), and that this amounts to what Executive Order 14297 calls foreign health systems getting "a free ride" on American-funded innovation.¹

Signed on 12 May 2025, the order gave the Secretary of Health and Human Services 30 days to communicate MFN price targets to manufacturers, and set out an escalation ladder for those who failed to make "significant progress": rulemaking to impose MFN pricing, drug importation under Section 804(j) of the FD&C Act, antitrust enforcement, review of export restrictions, and even modification or revocation of drug approvals.^1,25 It also directed HHS to build a direct-to-consumer purchasing channel for manufacturers selling at MFN prices, which later became TrumpRx.gov.²⁶

The forgotten first act of 2020

MFN did not begin in 2025. In November 2020, the first Trump administration issued the original Most Favored Nation Model, an interim final rule that would have benchmarked Medicare Part B payment for fifty high-spend drugs against the lowest price in comparator countries.²⁷ Courts blocked it within weeks, on procedural grounds (the administration had skipped notice-and-comment rulemaking), and CMS formally rescinded it in a December 2021 final rule, effective February 2022.²⁷ That history explains the 2025 design: this time the pressure runs through voluntary deals backed by tariffs, and the CMMI models arrive as properly noticed proposed rules built to survive the Administrative Procedure Act challenge that killed round one. The idea is unchanged, but the procedure has improved.

The 2025 sequence added one more primary document worth knowing: on 20 May 2025, HHS and CMS published the MFN price target: "the lowest price in an OECD country with a GDP per capita of at least 60 percent of the U.S. GDP per capita". That definition later reappears as the basket criterion in GLOBE and GUARD.²⁸ Industry's headline counter-estimate landed the same week: PhRMA put the cost of MFN pricing in Medicaid alone at roughly $1 trillion over a decade.²⁹

Two key statistics without a transparent source

Two numbers have fuelled the MFN debate ever since it started. The first claims that the US accounts for roughly 50% of the industry's global revenue from newer medicines. The second asserts that the US funds roughly 75% of global pharmaceutical profits. The White House uses a very strong comparative mental image to communicate this publicly: "The United States has less than five percent of the world's population and yet funds around three quarters of global pharmaceutical profits".^1,26 Given that the industry rarely contests this figure, it's probably not too far off.

But you, as a careful and informed reader, should still know this: the executive order cites no dataset for that 75% figure. During my research for this report the best reference I could find came from the EFPIA 2026 report, which estimates the US share of sales of new medicines launched between 2020 and 2024 at 74.1%.³⁰ The EFPIA report was not public when the MFN policy was first introduced, but it is based on IQVIA MIDAS data, which US representatives could easily have had access to. Speaking about this data, Grubert notes it is "widely quoted by the industry and certainly by the Trump administration".¹⁴ Other related figures that are published concern prices, not profit shares: the White House's claim that US brand prices run more than three times other OECD countries after discounts,²⁶ and USTR's figure of 3.9× versus Germany.¹⁵ While the 75% profit claim is most likely based on the IQVIA MIDAS dataset, it is still shocking that a policy this consequential is running on a statistic with no visible methodology.

Where the free-riding argument comes from

The free-riding premise did not start in the White House. Its most developed version belongs to Peter Kolchinsky, a biotech investor who set it out in The Great American Drug Deal in 2020 and has argued it ever since.³¹ His starting point is that every branded drug eventually goes generic. Today's high prices therefore buy a permanent stock of cheap medicines for everyone who comes later, a stock he calls the generic drug armamentarium. Generics are around 90% of the medicines people take and under 2% of health spending.³² With that in mind, paying for innovation is a debt each generation owes the next, and the arrangement only holds if every country that can afford to pay actually does.

Where Kolchinsky parts company with MFN is the remedy. His answer to underpayment abroad is trade leverage rather than price control at home: press wealthy countries towards their GDP-adjusted share, which he puts at roughly 60% above what many of them pay today, and keep the US market competitive instead of capping it.³² He reaches for defence burden-sharing as the parallel, where allies are asked to spend more rather than the US to spend less. MFN adopts his diagnosis and applies the treatment he warns against. Reading the two side by side is the quickest way to see what the policy is betting on: that a ceiling in the United States raises the floor everywhere else.

Background · Book review The Great American Drug Deal explained. My walkthrough of Kolchinsky's argument: the generic armamentarium, why he thinks the social contract works, and where his prescription differs from the one Washington chose. Watch on YouTube →

If you want the longer arc behind all of this, Paul Starr's The Social Transformation of American Medicine is still the standard account of how the United States built a medical market around professional authority and private insurance instead of a public payer.³³ It is a tough read, which I've attempted and failed multiple times, and it explains the structural fact the whole MFN argument rests on: the US is the only wealthy country with no national body that sets what a medicine is worth. MFN is an attempt to fill that gap from the outside, by borrowing the prices other countries' bodies have already set.

The instruments: letters, deals & tariffs.

The 17 letters

On 31 July 2025, letters went to seventeen companies: AbbVie, Amgen, AstraZeneca, Boehringer Ingelheim, Bristol Myers Squibb, Eli Lilly, EMD Serono, Genentech, Gilead, GSK, Johnson & Johnson, Merck, Novartis, Novo Nordisk, Pfizer, Regeneron, and Sanofi, with a sixty-day deadline.^2,3 The closing line left little to interpretation.

"Make no mistake: a collaborative effort towards achieving global pricing parity would be the most effective path… But if you refuse to step up, we will deploy every tool in our arsenal."

The letters to 17 manufacturers · 31 July 2025²

Pfizer signed first, at the deadline, on 30 September 2025.³ Nine more companies signed in a single day on 19 December;^20,34,35 Regeneron closed the set in April 2026;³⁶ by June 2026, all seventeen had deals.³ Each company announced its own version of the agreement. I've summarised all public press releases of the 17 pharmaceutical companies for you in the table below. They're the best public source we can use to speculate what MFN deals those companies have made with the Trump administration.

Company	HQ	Announced	Headline concessions	Source
Pfizer		30 Sep 2025	First deal; Medicaid MFN pricing; TrumpRx launch partner; tariff grace tied to US investment	Press release →
AstraZeneca		10 Oct 2025	~80% direct-to-consumer discounts on chronic-disease medicines; linked to $50bn US investment plan	Press release →
EMD Serono		16 Oct 2025	IVF / fertility portfolio; combined discounts up to 84%	Press release →
Eli Lilly		6 Nov 2025	Obesity / GLP-1 deal: Medicare tirzepatide at max $50/month; LillyDirect $299–449; TrumpRx	Press release →
Novo Nordisk		6 Nov 2025	Wegovy / Ozempic via TrumpRx; Medicare Part D & Medicaid pilot; three-year tariff exemption	Press release →
Amgen		19 Dec 2025	AmgenNow DTC expansion (~60–80% lower); Repatha $573 → $239 on TrumpRx; Medicaid MFN	Press release →
Boehringer Ingelheim		19 Dec 2025	$10bn US R&D investment through 2028; Jentadueto $525 → $55; TrumpRx	Press release →
Bristol Myers Squibb		19 Dec 2025	Free apixaban for Medicaid; ~80% DTC cuts on five medicines	Press release →
Genentech		19 Dec 2025	Medicaid MFN alignment; Xofluza $168 → $50 DTC via TrumpRx	Press release →
Gilead		19 Dec 2025	HIV / hepatitis / COVID medicines at international prices; Epclusa $24,920 → $2,425 DTC	Press release →
GSK		19 Dec 2025	Respiratory portfolio Medicaid MFN; DTC savings up to 66%; Advair $265 → $89	Press release →
Merck (MSD)		19 Dec 2025	Up to 70% DTC discounts; Januvia $330 → $100; TrumpRx	Press release →
Novartis		19 Dec 2025	Future launches at MFN price; Mayzent $9,987 → $1,137; Medicaid model	Press release →
Sanofi		19 Dec 2025	Average 61% price cuts; Plavix $756 → $16; $35/month insulin; TrumpRx	Press release →
Johnson & Johnson		8 Jan 2026	TrumpRx DTC; Medicaid MFN; reaffirmed $55bn US investment; new PA & NC plants	Press release →
AbbVie		12 Jan 2026	$100bn US R&D pledge; four-drug DTC / TrumpRx programme; tariff grace period	Press release →
Regeneron		23 Apr 2026	Medicaid MFN pricing; hearing-loss gene therapy free in the US; expedited FDA review	Press release →

Each link goes to the company's own announcement of its agreement. "Headline concessions" summarises what each company chose to lead with. The deals themselves remain confidential, so these self-descriptions are the closest thing to primary evidence on their contents. The nine 19-December announcements were coordinated with a White House fact sheet claiming a collective $150bn+ in US manufacturing pledges.³⁴

What the deals contain

The agreements themselves are confidential. But four common elements can be deduced from company statements and White House fact sheets, a synthesis Grubert has assembled and this report adopts with that attribution:^14,34

1. Some manufacturers have already committed to providing MFN prices on selected products to state Medicaid programmes.³⁷
2. MFN prices on all future launches, in all sectors of the US market, including the commercial sector. This is the historically novel part. "The commercial sector has always been the crown jewel of the US market," as Grubert puts it; the US government has never before reached into commercial-sector pricing, even prospectively.¹⁴
3. Direct-to-consumer distribution, in many cases via TrumpRx.gov. As of mid-July 2026 the platform lists 92 brand-name drugs from 15 of the 17 deal companies (fewer than 12% of the more than 800 branded products those companies sell), plus 600+ generics added in May 2026 through Amazon Pharmacy, Cost Plus Drugs, and GoodRx.^3,8 The site claims over $400 million in savings; the figure is unverified.⁸
4. The administration uses "repatriation" to describe shifting more pharmaceutical revenues from overseas markets to offset lower US prices. Traditionally, however, repatriation refers to bringing profits earned abroad back to a company's home country.

Alongside the deals, companies have announced US investment pledges exceeding $500 billion, though how much is new money, rather than a relabelling of projects already planned, is openly questioned.¹⁴

The tariff machinery

The deals were not signed out of enthusiasm. The proclamation of 2 April 2026, issued under Section 232 of the Trade Expansion Act, imposes a 100% tariff on patented pharmaceutical imports, then carves out the behaviours the administration wants:^4,38

The dates matter for anyone reading this in late July 2026: the tariff takes effect on 31 July 2026 for the seventeen Annex III companies, and on 29 September 2026 for all other importers.⁴ The UK sits in a category of its own: a +10% rate reducible to zero under its bilateral pharmaceutical pricing agreement. In practice, its December 2025 deal with Washington achieved that.^18,38,39 Generics and biosimilars are exempt.⁴

What "onshoring" means here

In the tariff proclamation, onshoring means moving pharmaceutical manufacturing capacity onto US soil. A company without an MFN deal can cut its tariff from 100% to 20% by filing an approved onshoring plan: it reports what share of its global production sat in the US in January 2025, commits to a higher share by January 2029, and justifies whatever it cannot move.^38,40 Because a new plant takes years to build, the plan alone buys the lower rate, long before any capacity exists. The second-order effect is the one to watch: the more of the world's supply that is made in the United States, the more say Washington has over who receives it.¹⁴

One further provision deserves more attention than it gets. Companies without deals seeking the reduced onshoring rate must tell the Commerce Department what percentage of their global production was US-based in January 2025, what it will be in January 2029, and justify any inability to relocate.⁴⁰ If production for the global market moves to the United States, Grubert observes, the US government acquires enormous leverage over every other country's medicine supply.¹⁴

The CMS models: GENEROUS, GLOBE & GUARD.

GENEROUS

The voluntary Medicaid model: eight-country basket, benchmarked to the second-lowest net price, PPP-adjusted. The blueprint everything else builds on.

Medicaid · voluntary · live

GLOBE

The mandatory Medicare Part B model: lowest price across 19 reference countries, PPP-adjusted, launching 1 October 2026.

Part B · mandatory · Oct 2026

GUARD

GLOBE's Part D counterpart: the same 19-country lowest-price benchmark, from January 2027, for drugs without an IRA-negotiated price.

Part D · mandatory · Jan 2027

GENEROUS: the Medicaid blueprint

Announced on 7 November 2025, the GENErating cost Reductions fOr U.S. Medicaid (GENEROUS) Model is the most detailed public guide to how MFN pricing is meant to work.^16,41 It is voluntary, for manufacturers and states, and runs five performance years from January 2026 to December 2030; Medicaid represents roughly 10% of the US pharmaceutical market.^5,14 Its mechanics, per the current Request for Applications (v2.1):⁵

• Comparator basket of eight countries: the G7 minus the US (UK, France, Germany, Italy, Canada, Japan) plus Denmark and Switzerland. All candidates have GDP per capita of at least 60% of the US level, PPP-adjusted; Grubert's inference on the two additions is that they are home to leading pharmaceutical companies.^5,14
• The benchmark: "the second lowest country-specific manufacturer-reported net price adjusted by gross domestic product per capita using a purchasing power parity method."⁵
• Net means net: manufacturers self-report true net prices, including discounts, clawbacks, and managed-entry agreements. If they don't, the US will use agencies to approximate them.⁵

The reporting window is revealing. The original November 2025 RFA gave companies nine months from calendar-year end to compile net-price data, an admission of how hard true net-price calculation is. Version 2.1, modified in February 2026, cut that to two months (data due 31 May), and the original document has since vanished from the CMS site; no archived copy exists.^5,14 CMS extended the application deadline in March 2026, a hint that manufacturer appetite for the voluntary version has been measured rather than enthusiastic.⁴²

GLOBE & GUARD: the mandatory escalation

On 19 December 2025, CMS proposed two further models, and these are mandatory.⁴³ The GLOBE Model (Global Benchmark for Efficient Drug Pricing) covers Medicare Part B: selected single-source drugs and sole-source biologicals in oncology, rheumatology, immunology, ophthalmology, and endocrinology, in regions covering roughly 25% of Part B beneficiaries, launching 1 October 2026.^6,43 The GUARD Model (Guarding U.S. Medicare Against Rising Drug Costs) does the equivalent for Part D from January 2027, replacing the inflation-rebate benchmark with an international one: manufacturers owe a rebate whenever the Medicare net price exceeds the international benchmark.⁷

Two design choices mark the escalation from GENEROUS. The basket grows from 8 countries to 19 (every OECD member with at least 60% of US PPP-adjusted GDP per capita and a $400 billion economy), and the benchmark drops from the second-lowest price to the lowest.^7,43 Both proposed rules drew their comment deadlines on 23 February 2026 (GUARD alone attracted over 20,000 submissions) and final rules are expected to be litigated the moment they appear.^7,43

The mechanics: how to calculate the MFN price.

Here is what makes MFN categorically different from every reference-pricing scheme that came before it. Dozens of countries have practised external reference pricing for decades, all of them referencing list prices, because that is all anyone can see. But list prices are misleading everywhere: confidential discounts and rebates of 50% or considerably more are routine in Europe and, via PBM rebates, in the US alike.¹⁴ Every payer in the world has aspired to reference net prices; none has succeeded. The United States believes it will be different, for a simple reason: it is asking companies to self-report, against the backdrop of Section 232 tariffs and everything else in this report.^5,14

Here's how you can calculate the MFN price following the GENEROUS methodology. You start by collecting the manufacturer's true net price in each of the eight basket countries, inclusive of discounts, clawback repayments, and managed-entry agreements. Then you adjust each for purchasing power (GDP per capita, PPP), and rank them. Take the second-lowest price, and voila, that's your MFN benchmark for the US price.⁵

Note the direction of travel across the three systems: 8 countries → 19 countries; second-lowest → lowest; voluntary → mandatory. Each iteration widens the net and tightens the benchmark. That trajectory, not any single model's parameters, is the planning assumption prudent companies are building into launch-sequencing decisions.^10,46

The IRA dimension.

MFN did not arrive in a vacuum. Under the Inflation Reduction Act, Medicare has been negotiating "maximum fair prices" since 2023. The programme has continued seamlessly under the current administration, with CMS Administrator Mehmet Oz publicly endorsing it.²¹ Three cycles are now in motion:

• Cycle 1: prices live since 1 January 2026. Ten Part D drugs: Eliquis, Enbrel, Entresto, Farxiga, Imbruvica, Januvia, Jardiance, NovoLog/Fiasp, Stelara, and Xarelto. These drugs consumed about $46.4 billion of Part D spending in 2022, roughly 19% of the total.^47,48 Negotiated prices are a minimum of 38% below 2023 list; CMS puts the savings at roughly $6 billion a year for Medicare and $1.5 billion a year in beneficiaries' out-of-pocket costs.⁴⁸
• Cycle 2: effective 1 January 2027. Fifteen more Part D drugs, including Ozempic. Agreements were reached on all fifteen; had the negotiated prices applied in 2024, CMS estimates they would have saved $8.5 billion, about 36% lower net spending.²¹
• Cycle 3: effective 1 January 2028. Selected in January 2026: fifteen drugs plus one renegotiation, including, for the first time, Part B drugs (Trulicity, Xolair, Botox, Biktarvy, Cosentyx, Xeljanz, Verzenio among them), representing ~$27 billion in Medicare spending. All manufacturers agreed to participate.²¹

The IRA's first test: how Medicare negotiation compares with MFN pricing

At ISPOR 2026, researchers from the University of Washington's CHOICE Institute and UC San Diego benchmarked the cycle-2 negotiated prices against international list prices in the 19 MFN reference countries. The result: maximum fair prices came in 15–60% below estimated net prices, with twelve of the fifteen drugs below their statutory ceilings, and still sat substantially above the average published list price of the 19 reference countries.⁵¹

America's most aggressive domestic price-negotiation programme, running at full effectiveness, lands prices far above what MFN benchmarks would demand. MFN also references net prices, which sit below the list prices in that comparison. IRA negotiation and MFN are not two versions of the same policy; MFN is a categorically deeper cut. The formal interaction confirms the point from the other direction: GUARD explicitly excludes drugs already carrying an IRA-negotiated price. The two systems are engineered to stack, not overlap.⁷

What it means for Europe.

The fracture in the old pricing order

For half a century, European revenue was additive: whatever terms a company accepted in Europe, its US business was untouched. Net-price referencing ends that. On future launches, a discount conceded in any basket country can become the US benchmark. The question every launch committee asks has changed from "what price can we get in France?" to "what does a French price do to our American business?" Senior executives have answered publicly: they will take whatever action is necessary to protect US prices.¹⁴ The arithmetic explains the caution. The US supplies roughly half of the industry's global revenue from newer medicines.^1,26 A discount that wins a mid-sized European market can now reprice sales worth many times more in the US. No launch committee signs that trade lightly, and the data in this section show how many no longer do.

The evidence, as of July 2026

• Launches: EU drug launches fell approximately 35% in the ten months after the MFN executive order compared with the preceding ten months; over 90% of drugs approved in 2025 launched first in the US, most still unavailable elsewhere.¹⁰
• France: applications to the early-access pathway dropped from 25 in 2024 to 10 in 2025. "The arrival of Trump has altered companies' strategy," says HAS president Lionel Collet. "Manufacturers all talk to me about Trump."¹⁰ Pfizer's Albert Bourla put the choice starkly at JPMorgan in January 2026: forced to pick between cutting US prices to French levels or leaving: "we stop supplying France."⁵²
• Companies on the record: Insmed postponed the German launch of Brinsupri (EU-approved November 2025, US-launched August 2025), with CEO William Lewis citing MFN directly: "We want clarity on the MFN policies. It seems prudent to put things on hold."¹⁰ Bayer's Stefan Oelrich, speaking with his EFPIA hat on: "We're seeing first signs of delayed introductions into Europe."¹⁰ AstraZeneca now builds its MFN forecasts excluding reference markets.⁴⁶
• Withdrawals: Amgen pulled Repatha from Denmark; Indivior withdrew Subutex and Suboxone from Sweden and other markets.¹⁰

And this pressure lands on a continent that was already slow. The latest EFPIA W.A.I.T. Indicator (published May 2026, covering 168 medicines authorised 2021–2024) puts the EU27 average at 597 days from approval to availability (median 532), ranging from 56 days in Germany to 1,201 in Romania. Only 45% of new medicines are available in the average member state; 49% are not available anywhere in Europe; just 28% enjoy full public reimbursement, down from 42% in 2019.^11,23 EFPIA's director general drew the MFN connection explicitly: it is unrealistic, Nathalie Moll warned, to demand the lowest possible prices and still expect faster access and investment.²³

Article 56a: the counter-move that may backfire

The EU's revised pharmaceutical legislation, politically agreed with formal adoption expected in summer 2026 and Official Journal publication in the autumn,^12,53 answers access disparities with obligation. Under Article 56a, a member state may request that a marketing authorisation holder place a protected product on its market; the company then has three years to make it available with continuous, sufficient supply. Failure carries a real sanction: loss of regulatory market protection in that member state, opening the door to generic or biosimilar entry from year six of data protection.¹² The final compromise softened the duty to "best efforts," with good-faith obligations on both sides and exceptions for circumstances outside the company's control, but the architecture stands, and member states may apply it as early as twelve months after the directive enters into force.¹²

The intention, addressing real access disparities at last, is easy to defend. The timing is the problem. As Sidley's life-sciences team put it, if member states treat the launch obligation as a strict result obligation, "the consequences would be severely negative, in particular, in Member States used as reference countries in Most Favored Nation comparisons in the United States."¹² Brussels is making European launches compulsory at the exact moment Washington is making them expensive. Grubert's worry is that the uniformity Article 56a achieves could be a levelling down: everyone gets the drug at the same time: later, or not at all.¹⁴

The JCA capacity problem

Europe's other big procedural change, the Joint Clinical Assessment, is running below its own forecasts. The official 2026 work programme plans roughly 50 JCAs (35 cancer medicines, 15 ATMPs) and explicitly declines any voluntary assessments "given the high workload."⁵⁴ Against those plans, Grubert counts 13 JCAs actually started in 2025 versus 20–25 forecast, and five by May 2026 against the ~50 planned, with IQWiG assessing in seven of the first seventeen, Italy's AIFA yet to take a single assessor role, and two assessments discontinued over evidence gaps.¹⁴ A slower-than-planned JCA machine, colliding with launch-hesitant companies and a launch obligation, is not the streamlining Europe advertised.

The cost of settling: lessons from the UK

The UK chose yet another exit: a bilateral pricing arrangement, agreed in principle in December 2025 and now held up by USTR as the template,^9,18 trading tariff exemption for materially higher NHS spending on new medicines: NICE's cost-effectiveness threshold rises to £25,000–£35,000 per QALY, the VPAG rebate falls from 23% to 14.5%, and branded-medicine spending is committed to grow from 0.3% to at least 0.6% of GDP by 2036.¹⁷

What that buys, and what it costs, is now contested in the pages of the BMJ. A peer-reviewed analysis projects roughly £45 billion diverted from other NHS care by 2036 and, applying NHS opportunity-cost modelling, an estimated 229,000 excess deaths by 2036 (291,000 including adult social care effects).^17,24 The figure deserves its caveats, which the authors themselves supply: it is a modelled counterfactual, not observed mortality, and the deal's claimed innovation benefits are equally unproven. The government's defence rests on access: "life-changing new medicines that they previously would have been denied."⁵⁵ However the numbers settle, the structural point stands: this is what the template costs. Germany, under a Section 301 investigation with a hearing set for 22 September 2026, is now invited to consider the same trade.^9,15

From the archive · The Pharma Perspective

Is raising the NICE threshold bad for NHS patients?

I recorded this with Karl Claxton before the threshold change was announced. He and Mark Sculpher argued the opposite case to the one the deal has now settled: that lifting the threshold moves health away from other NHS patients rather than creating it. Worth watching against the numbers above.

▶ Watch the conversation

The China dimension.

In 2015, China originated 2 of the world's 76 first-in-world drug approvals; the US originated 41. By 2024, the count was China 39, US 41, with Europe at 11.¹³ Grubert's reading of the most recent data is that 2025 was the crossover year, with roughly 45 new drugs originating in China against fewer than 30 from the US.¹⁴ EFPIA's 2026 figures now put numbers on it: 46 of 2025's new chemical and biological entities originated in China, against 28 from the US and 16 from Europe.³⁰ Trade press had already called it a "record-breaking year" for Chinese novel launches.⁵⁶ China's regulator approved 228 new drug applications in 2024 and 289 in 2025.^57,58

The chart below puts the shift in one picture, and you can read it through two lenses. EFPIA counts new chemical and biological entities by the origin of the developer: on those figures China's 18 entities in 2021 trailed the US by almost half, and four years later the positions have reversed.³⁰ Liu and colleagues count something narrower, first global approvals of innovative drugs, across a longer run: China climbs from 2 in 2015 to 39 in 2024, drawing level with the US rather than passing it.¹³ Neil was working from the EFPIA figures in our conversation.¹⁴ Switch the source in the chart and the direction of travel holds; only the speed changes.

Access mechanics are evolving just as fast. The National Reimbursement Drug List, updated once between 2009 and 2017, now updates annually, through a negotiation compressed into a single weekend that participants call "soul bargaining": average discounts around 60%, some multinationals walking away, most trading price for enormous volume.^14,59 And in December 2025 came a new instrument: the first Commercial Insurance Innovative Drug List, 19 premium-priced products (14 oncology, including five CAR-T therapies), creating a high-price channel alongside the NRDL and, plausibly, a real-world-evidence on-ramp back into it.¹⁹

The West's door is opening from both sides. As described by the MHRA's chief executive in April 2026: "Western countries can no longer afford to reject Chinese data, otherwise they will cut themselves off from the most innovative drugs."²² The US retains deeper reservations (data generalisability, industrial competition, congressional action) and has, per Grubert, encouraged allies to share its wariness.¹⁴

The MFN connection matters most. Chinese companies price aggressively into crowded categories (the PD-1 wars proved it) and price to market where competition is thin.¹⁴ Chinese entrants without US exposure don't have to follow the MFN calculus: a low European price costs them nothing in a market they are not in. If MFN-driven hesitancy clears the European field, the companies best positioned to take the space are precisely the ones the policy was never designed to touch.

Three scenarios.

Scenario 1: The roots hold

The optimistic reading: today's hesitancy is uncertainty, not strategy. Once final rules land, litigation resolves, and companies learn what net-price reporting actually requires, launch sequencing normalises, perhaps with higher European prices as governments absorb part of the "fair share" argument (the UK's 25% net-price rise is the visible precedent³). Grubert takes "small comfort" from this possibility and questions it in the same breath: clarity may simply confirm that European launches are expensive.¹⁴

Scenario 2: The gap widens

The worrying middle path: hesitancy hardens into structure. The US-first gap widens from months to years; Article 56a forces a choice between compulsory launches and surrendered exclusivity; some companies conclude that certain European markets are simply not worth what they cost in Washington. Europe's access statistics, already 597 days and falling availability,¹¹ deteriorate year by year, and the world Grubert describes for lower-income countries today ("access much, much later — and nobody's really doing anything about that") migrates up the income scale.¹⁴

Scenario 3: The rise of the dragon

The dark-horse future: the standoff persists long enough that Chinese-originated products (increasingly first-in-class, acceptable to Western regulators, and free of MFN exposure) take the European positions that US-referenced companies vacate. Europe gets its medicines, at prices Chinese entrants find rational; the transatlantic industry gets a structural competitor in its second market; and the US discovers that its pricing lever worked on everyone except the competitor it worries about most. The MHRA's data posture suggests the door is already ajar.²²

What HEOR & market access professionals should do differently.

1. Model the spillover, not the market alone. Every European pricing recommendation now needs an MFN-exposure line: which US models could reference this price, on what timeline, with what PPP adjustment. A 10% deeper discount in Germany is no longer a German decision. Build the second-lowest (GENEROUS) and lowest (GLOBE/GUARD) benchmark cases explicitly.^5,7
2. Treat confidentiality as an asset with a price. Net-price referencing makes every confidential discount a potential US liability, and makes the machinery of confidentiality (managed-entry agreements, clawbacks, outcome-based deals) part of the reported calculation.⁵ Expect payers to discover their own leverage here: a confidential structure that keeps a price out of the US calculation is now worth something to both sides.
3. Re-sequence launch plans against Article 56a's clock. Map every pipeline asset against the request-window and three-year mechanics; identify the member states where a request is most likely; decide in advance where you would concede and where you would surrender protection.¹²
4. Stop using IRA prices as your US floor. The ISPOR comparison shows negotiated maximum fair prices sitting well above MFN reference levels.⁵¹ Your downside case is the cheapest basket country you launch in, PPP-adjusted.
5. Watch the JCA queue as a leading indicator. Assessment starts running below forecast is launch hesitancy showing up in regulatory paperwork before it shows up in revenue.^14,54 If you work payer-side, the same queue tells you what's not coming.
6. Build a China position now. Whether your company sees in-licensing opportunity, competitive threat, or both: the crossover in origination has happened,¹³ and the first Western regulator has said Chinese data is admissible.²² "We don't have a China view" is no longer a defensible answer in a market access strategy review.
7. Practise empathy as strategy. Grubert's closing prescription is not softness: industry understanding finite payer budgets, and payers understanding what a flourishing research industry supplies.¹⁴ In a world where governments negotiate with tariffs, the professionals who can articulate the other side's constraints will write the agreements everyone else operates under.

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Full reference list.

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