Presentation (CTI)

OBJECTIVES: President Trump’s “Most Favored Nation” (MFN) initiative aims to reduce U.S. prescription drug prices by benchmarking them to the lowest prices in economically comparable countries. On May 20, 2025, the U.S Department of Health and Human Services (HHS) specified that target prices would be based on those in OECD countries with a GDP-per-capita of at least 60% of the U.S. level. This policy may create upward pricing pressure or delay drug launches in referenced countries. This research aims to identify OECD countries meeting the HHS criteria and assess which may be most affected by the MFN policy, based on current drug pricing data.
METHODS: We used 2023 OECD GDP-per-capita data (adjusted for purchasing power parity, PPP) to identify countries meeting the HHS eligibility threshold. For each, we collected official ex-factory prices for the 50 top-selling U.S. prescription drugs in 2024. The lowest price per drug among eligible countries was identified and compared to U.S. Department of Veterans Affairs (VA) prices.
RESULTS: In 2023, the U.S. GDP per capita (PPP) was $82,769. Twenty-five OECD countries met the 60% threshold (Australia, Austria, Belgium, Canada, Czechia, Denmark, Finland, France, Germany, Iceland, Ireland, Israel, Italy, Japan, Lithuania, Luxemburg, Netherlands, New Zealand, Norway, Slovenia, South Korea, Spain, Sweden, Switzerland, and the UK). On average, aligning U.S. prices with the MFN benchmark would require a 78% price reduction. The countries most frequently offering the lowest prices, were South Korea (20 drugs) Australia (10), and Japan (5), with average discounts of 84%, 79%, and 75%, respectively.
CONCLUSIONS: Implementation of the MFN policy could significantly influence global drug pricing strategies and launch sequencing. South Korea, Australia, and Japan—frequently the sources of the lowest international prices—may face increased pressure to either raise list prices or potentially suffer delay in market entry to avoid being used as reference points.