The Most Favored Nation Policy: early insights into Europe’s response

Simran Gurung

Wed, March 25, 2026 astatine 11:51 AM CDT 6 min read

On 12 May 2025, US President Donald Trump signed an enforcement bid directing the US Department of Health and Human Services (HHS) to unafraid Most Favored Nation (MFN) pricing for medicines. Central to this argumentation is the instauration of International Reference Pricing (IRP), a mechanics that benchmarks US cause prices against those successful selected comparator markets. The model consists of 3 IRP models: GENEROUS (GENErating outgo Reductions fOr US Medicaid), GLOBE (Global Benchmark for Efficient Drug Pricing) and GUARD (Guarding US Medicare Against Rising Drug Costs), each incorporating a handbasket of planetary notation countries, galore of which are European markets.

Given the US’s monolithic power connected planetary pricing, the inclusion of European markets successful these IRP baskets introduces imaginable spillover effects impacting a product’s launch, pricing strategy, marketplace prioritisation, and imaginable withdrawals successful European countries. To research whether these dynamics are already influencing manufacture behaviour, GlobalData analysed the merchandise motorboat and withdrawal trends utilizing its Price Intelligence (POLI) database, comparing enactment successful the 10 months earlier (12 July 2024 – 12 May 2025) and aft (12 May 2025 – 12 March 2026) the policy’s announcement.

GlobalData’s Price Intelligence (POLI) investigation indicates a important driblet successful the fig of pharmaceutical launches crossed Europe, with an wide diminution of 35% successful the 10 months pursuing the instauration of IRP successful the US compared to the erstwhile 10 months. The signifier becomes somewhat much pronounced erstwhile focusing connected the countries included successful the US notation baskets. For example, the European markets included successful the GENEROUS exemplary (Denmark, France, Germany, Italy, Switzerland, and the UK) observed a 37% simplification successful launches. The GLOBE and GUARD models notation a broader acceptable of European countries (14 of the 17 countries referenced successful total), including Austria, Belgium, the Czech Republic, Denmark, France, Germany, Ireland, Italy, the Netherlands, Norway, Spain, Sweden, Switzerland, and the UK. Of the European markets referenced successful the GLOBE and GUARD model, the mean fig of launches successful these markets has declined by 43% successful the 10 months pursuing MFN compared to the 10 months prior.

It is important to admit that portion different factors volition person contributed to this driblet (such arsenic regulatory delays, pricing and reimbursement negotiations, oregon proviso concatenation constraints), the inclination seen is an aboriginal awesome of the interaction that the instauration of IRP successful the US has had connected European markets. Based connected the MFN argumentation model and notation baskets, the lowest-priced markets are utilized arsenic a notation constituent for US pricing. Consequentially, determination is simply a structural disincentive to motorboat aboriginal successful countries wherever prices are importantly lower, and pharmaceutical companies whitethorn beryllium deliberately delaying the motorboat of their products successful definite European markets. Additionally, US biotech firms person reportedly go wary of entering into licensing agreements with European partners successful lawsuit they mightiness beryllium accused of inadvertently triggering MFN provisions that could erode US pricing. Heightened uncertainty whitethorn truthful beryllium liable for the strategical hold observed crossed Europe.