OBJECTIVES: Widespread use of external price referencing limits the ability of individual countries to adjust drug prices to their affordability. Consequently, people in middle-income countries (MICs) are condemned to pay based on willingness-to-pay in high-income countries (HICs). We investigated the role of external price referencing in enhancing drug affordability in MICs. METHODS:  Using Herceptin® (trastuzumab) for treatment of HER2-positive breast cancer as a case study, we compared prices of 150mg vials across 14 HICs and 5 MICs. We firstly estimated the relative budget impact of trastuzumab by using public list prices and actual exchange rates. We assumed same prevalence rates and equal access across the countries. Secondly, to reflect relative affordability of trastuzumab, prices were converted based on purchase power parity (PPP) conversion rates. Thirdly, with the aim to achieve equal affordability across countries, assumptive prices were calculated using PPP conversion rates and the USA trastuzumab price as an external reference price (no rebates included). RESULTS:  The relative budget impact of trastuzumab per million population is 4 times higher in MICs compared to HICs. There was no association between price and GDP/capita across countries [R=0.004]. However, trastuzumab was 6 times less affordable in MICs compared to HICs [R=0.420]. Using assumptive prices resulted in an improvement of affordability in MICs (i.e., 3 times lower than in HICs [R=0.875]). CONCLUSIONS:  External price referencing does not facilitate access to expensive drugs in MICs. Equal affordability across countries can be improved by using price differentiation. MICs should therefore, base their price on national economic and social priorities (value-based pricing) instead of using external reference pricing.