Abstract

The Trump Administration issued an Executive Order on May 12, 2025, with the intent to “equalize pricing across developed countries” through a “Most-Favored Nation” approach with international reference pricing (IRP). IRP has been used extensively in Europe and resulted in short-term budget savings. However, list prices quickly converged to those of major high-income markets, such as Germany and France, without evidence of reduced prices. Despite frequent use of confidential price agreements to differentiate net prices in countries that cannot afford those price levels, access to innovative medicines has been delayed and reduced. This suggests that introduction of IRP in the United States could further limit access in designated reference countries, without sustainable reductions in US price levels. Instead of referencing prices from other countries, the United States should establish its own system for value assessment of medicines, whether at the time of launch or after drugs have been on the market for several years.