Plain Language Summary

Prescription drug prices in the United States are much higher than in other wealthy countries. To address this, policy makers have proposed using international reference pricing, a policy that would link US drug prices to those paid in similar countries. This approach, sometimes described as a “most-favored nation” policy, aims to make medicines more affordable for Americans by matching the lowest prices observed elsewhere

This article examines what has happened in Europe, where international reference pricing has been widely used for many years. Although the policy has sometimes led to short-term savings, it has not produced lasting reductions in overall price levels. Instead, prices have tended to converge around those of the largest and wealthiest countries. As a result, many smaller or lower-income countries have struggled to afford new medicines, leading to delays, restricted coverage, or lack of access for patients. To cope with this, countries often rely on confidential discount agreements, which can reduce transparency and further complicate access decisions.

The authors argue that introducing this approach in the United States could create similar problems. While prices might fall initially, long-term savings are unlikely. Companies could respond by delaying or withdrawing products from certain countries or by raising launch prices in the United States. Over time, this could reduce access, weaken incentives for innovation, and fail to solve the underlying affordability problem.

For patients, the findings highlight that lower list prices do not automatically mean better access to needed treatments. For healthcare decision makers, the results suggest that importing pricing systems from other countries may lead to unintended consequences. For researchers, the study shows the importance of evaluating how pricing policies affect access, innovation, and long-term health outcomes.

 Instead of relying on foreign prices, the authors recommend that the United States develop its own system for assessing the value of medicines. This would involve evaluating how well treatments work, how much they improve patients’ lives, and whether they provide good value for money, hereby offering a more sustainable path toward affordability and access.

Note: This content was created with assistance from artificial intelligence (AI) and has been reviewed and edited by ISPOR staff. For more information or for inquiries on ISPOR’s AI policy, click here or contact us at info@ispor.org.