Global Pricing Meets Domestic Policy: Analyzing the Financial Impact of the Most-Favored Nation Approach on the United States Medicine Prices
Author(s)
Claudio Valenti, MA1, David Ringger, PhD2.
1Cencora, Milan, Italy, 2Cencora, Bern, Switzerland.
1Cencora, Milan, Italy, 2Cencora, Bern, Switzerland.
OBJECTIVES: Assess the potential impact of a Most-Favored Nation (MFN) type of approach on the prices of medicines in the United States (US) by applying international reference pricing (IRP) rules.
METHODS: Identify medicines for cancer, rare diseases, and common conditions that have been launched in 16 countries with nominal GDPs at least 60% of that of the US and have been commercially available in the US for at least 4 years. Develop IRP rules that the US could potentially adopt. Compare projected US prices under each IRP scenario with actual prices.
RESULTS: The magnitude of potential price reductions varied significantly depending on the IRP rule applied. Across the modeled scenarios for the selected medicines, we found reductions ranging from 12% to 98% within 4 years of market entry in the US. Additionally, among the products analyzed, oncology medicines experienced greater price reductions compared to advanced therapy medicinal products (ATMPs).
CONCLUSIONS: Our analysis demonstrates that implementing IRP rules could substantially lower medicine prices in the US. The extent of the price reduction is multifaceted, heavily influenced by factors such as IRP rules, global launch sequence, and pricing models applied in other countries. These findings highlight the need for nuanced policy design, as companies must balance pricing considerations with investment in research and development, assess potential pricing shifts in low-income countries, and account for the timing and strategic planning of global medicine launches.
METHODS: Identify medicines for cancer, rare diseases, and common conditions that have been launched in 16 countries with nominal GDPs at least 60% of that of the US and have been commercially available in the US for at least 4 years. Develop IRP rules that the US could potentially adopt. Compare projected US prices under each IRP scenario with actual prices.
RESULTS: The magnitude of potential price reductions varied significantly depending on the IRP rule applied. Across the modeled scenarios for the selected medicines, we found reductions ranging from 12% to 98% within 4 years of market entry in the US. Additionally, among the products analyzed, oncology medicines experienced greater price reductions compared to advanced therapy medicinal products (ATMPs).
CONCLUSIONS: Our analysis demonstrates that implementing IRP rules could substantially lower medicine prices in the US. The extent of the price reduction is multifaceted, heavily influenced by factors such as IRP rules, global launch sequence, and pricing models applied in other countries. These findings highlight the need for nuanced policy design, as companies must balance pricing considerations with investment in research and development, assess potential pricing shifts in low-income countries, and account for the timing and strategic planning of global medicine launches.
Conference/Value in Health Info
2025-11, ISPOR Europe 2025, Glasgow, Scotland
Value in Health, Volume 28, Issue S2
Code
HPR109
Topic
Economic Evaluation, Epidemiology & Public Health, Health Policy & Regulatory
Topic Subcategory
Pricing Policy & Schemes, Public Spending & National Health Expenditures, Reimbursement & Access Policy
Disease
Genetic, Regenerative & Curative Therapies, No Additional Disease & Conditions/Specialized Treatment Areas, Oncology, Rare & Orphan Diseases