Presentation (CTI)

OBJECTIVES: Assess whether the introduction of International Reference Pricing (IRP) in the US through the May 2025 Most Favored Nation (MFN) Executive Order aligns with international experience and with best practice guidelines for use of IRP.
METHODS: The only US IRP system elements announced in May - formula and reference country basket - were compared to those of the 75 countries using IRP and examined in GlobalData’s IRP 360 country profiles. The US formula and basket were also assessed in light of the best practice guidelines for IRP use from a Holtorf et al 2019 paper published in Value in Health Regional Issues.
RESULTS: The US intends to reference the lowest price in a basket of 16 reference countries, which have GDP/capita of at least 60% of the US’s GDP/capita. Among the 75 comparator countries, only 25.3% reference the lowest price. All countries using “lowest” as their IRP formula have lower ability to pay than the US, based on GDP/capita. The US is also an outlier with its large reference basket. Of the 75 markets, 26.7% reference 1-5 countries, 28% reference 6-10 countries, 18.7% reference 11-15 countries, 9.3% reference 16-20 countries, 1.3 % reference 21-25 countries, 13.3% reference 26-30 countries and 2.7% reference more than 30 countries. Notably, among the countries with a basket larger than or comparable to the US’s, only Bahrain, Egypt, Kuwait, Poland and Spain reference the lowest price. Best practice guidelines indicate 5-7 countries is the optimal basket size and the average or median price should be referenced.
CONCLUSIONS: US plans go against current IRP trends and the best practice guidelines, raising the risk of drug shortages, launch delays and price rises, if implemented in their current form. The US calculation may be that adverse effects on patient access will be externalized to markets outside the US.