Presentation (CTI)

OBJECTIVES: Most Favoured Nation (MFN) pricing has re-emerged as a central feature of US drug pricing reform, seeking to align US prices with those in comparable economies. Under the proposed GLOBE (Part B) and GUARD (Part D) models, CMS would reference the lowest international list price from an OECD basket within Medicare’s inflation rebate framework, adjusted for GDP purchasing power parity (PPP). This study quantifies MFN benchmark gaps and explores implications for pricing strategy.
METHODS: Prices were analysed for the top 25 drugs by Medicare spend in Parts B and D (CMS data, Q1-Q3 2025) in June 2026. US and international list prices across 19 MFN basket countries were compared at HCPCS and NDC unit level. PPP-adjusted comparisons were conducted to reflect economic differences.
RESULTS: International list prices were, on average, 59% lower than US prices for Part B drugs (range: 48% [GB] to 82% [KR]) and 79% lower for Part D drugs (range: 70% [IT] to 91% [KR]). After PPP adjustment, gaps remained substantial at 49% (range: 19%-76%) for Part B and 74% (range: 57%-88%) for Part D. Within-country variation was notable: in Germany, PPP-adjusted Part B prices averaged 51% below US levels but ranged from 35% above to 81% below. Applying MFN benchmarks would imply average discounts of 76% (35-96%) for Part B and 90% (69-98%) for Part D.
CONCLUSIONS: MFN policy could create significant rebate exposure across Medicare. However, because benchmarks rely on published prices, manufacturers may increasingly use list-to-net strategies to narrow visible cross-country gaps while preserving confidential discounts. As GLOBE and GUARD evolve, the interaction between benchmark design and gross-to-net dynamics will be critical, shaping both Medicare savings and manufacturer responses, including price-setting architecture plus launch decisions and sequencing.