One year after MFN: How US policy is reshaping the global pharma model
Just over a year has passed since the Trump administration sent letters to 17 leading manufacturers demanding steps towards Most-Favoured Nation (MFN) pricing. Agreements have since been extended further, including nine mid-sized companies announced in August 2026. Industry's response has unfolded against a much broader set of pricing, trade, and industrial policies.
MFN now coexists with Medicare prices negotiated under the Inflation Reduction Act and with the CMS GENEROUS, GLOBE, and GUARD models, which seek internationally benchmarked prices in Medicaid and Medicare. TrumpRx, launched in February 2026, added a route for discounted cash prices direct to patients. The White House projects $529 billion in savings over a decade, though the agreements remain confidential.
Pricing has also become intertwined with industrial policy. The April 2026 Section 232 action established tariffs of up to 100% on certain patented pharmaceutical imports, with preferential treatment linked to approved US onshoring plans and MFN agreements. The White House credits the prospect of those tariffs with helping spur roughly $400 billion in US investment commitments; tax provisions in the One Big Beautiful Bill Act (OBBBA) reinforced the signal.
For European leaders, the central question is therefore no longer whether MFN will lower US prices, but how US pricing pressure, trade policy, tax incentives, and the commercial response they have elicited could change where companies invest, manufacture, and launch.
Did MFN actually delay EU launches or change EU pricing?
The clearest response to the broader US policy agenda so far has arguably come not in European pricing, but in capital allocation.
AstraZeneca announced $50 billion in US investment through 2030, Novartis has progressed a $23 billion programme across seven new sites, and GSK committed $30 billion to US R&D and supply chain over five years. The trend extends beyond the original MFN cohort: a July 2026 New Jersey expansion took BeOne Medicines' total US manufacturing investment above $1 billion.
It would be too simplistic to attribute these investments directly to MFN or tariffs: capacity needs, proximity to the world's largest market, existing plans, and OBBBA's tax incentives all matter. Indeed, the significance of Section 232 may lie less in tariffs actually paid on major innovative medicines than in the leverage prospect of tariffs provided alongside MFN negotiations.
This creates an important distinction in durability. MFN agreements are largely tied to the current administration, though the White House has acknowledged efforts to codify them; manufacturing plants are multi-year commitments that will outlast the political cycle. The most enduring legacy may therefore be where medicines are developed and made, rather than the MFN prices negotiated today.
Has the same shift appeared in EU launches?
The early signals are consistent, but causality remains unproven.
IQVIA's July 2026 analysis found that launches of Novel Active Substances in the EU4+UK have declined since May 2025. Crucially, the downturn appears to have begun around November 2024, following an earlier decline in US launches. Since the first EU4+UK launch historically follows the US by about ten months, part of the European decline may reflect normal pipeline fluctuation, rather than MFN.
A June 2026 analysis from King's College London goes further by adding the missing comparator. Across matched twelve-month windows either side of the MFN Executive Order, launches fell 29.9% in the 19-country GLOBE/GUARD reference basket and 37.8% in the eleven EU Member States, against 10.5% in the US. Among non-orphan products, the divergence is starker still: US launches were flat while the same products fell by roughly a third to a half across the reference markets, which a general industry slowdown would not produce.
Market withdrawals are the other side of the same calculation. As reported in Danish media, Amgen removed Repatha from Denmark in February 2026, affecting more than 2,000 high-risk patients, after confidential tender prices negotiated through Amgros (agency that supplies drugs to Danish public hospitals) collided with Denmark's place in the US reference baskets.
Switzerland offers the clearest company-level evidence. An August 2026 anonymised survey of Interpharma members found that, between January 2025 and June 2026, companies chose not to submit seven of 22 new innovative medicines for Switzerland's Specialties List because of MFN concerns. Three have not been filed with Swissmedic at all.
Caveats remain, this is one year of data, confounded by EU legislative reform and national cost-containment, but the direction is consistent. It is possible that the clearest signals will not be prices, but decisions on whether or not to submit for reimbursement, enter a market, or resequence launch.
Will Europe change its pricing systems to avoid becoming the low-price anchor?
This may ultimately be the more consequential MFN question. Europe does not have one pharmaceutical price: national HTA methodologies, budget constraints, external reference pricing, and confidential contracting create substantial variation between countries, so a uniform response is unlikely.
The UK is the clearest early case study. Under the UK-US Arrangement on Pharmaceutical Trade and Pricing, the UK committed to raising the net price the NHS pays for prospective new medicines by 25% from April 2026 and to increasing spending on new medicines as a share of GDP. NICE's cost-effectiveness range rises from £20,000–£30,000 to £25,000–£35,000 per quality-adjusted life year (QALY), the measure of the cost of an additional year of life in perfect health. It also goes beyond price: the US committed to temporary tariff protections, addressed the risk of UK prices becoming the lowest international benchmark, and both governments stated they expect no delay to UK launches.
The EU's response has so far been trade-led, rather than price-led. The August 2025 EU-US joint statement caps US tariffs on EU pharmaceutical exports at 15%, inclusive of Section 232 measures, and the European Parliament approved the implementing legislation in June 2026. That shields EU exporters from the higher rates applied elsewhere, but leaves pricing untouched, and EFPIA (European Federation of Pharmaceutical Industries and Associations) has called the outcome far from optimal, pressing instead for a strategic sector dialogue on competitiveness.
That creates a more complex possibility than European prices simply rising. MFN could push prices up while simultaneously reducing or delaying access to novel treatments in some markets, widening divergence across Europe.
Implications for EU and the UK
Three strategic implications follow.
1. Global pricing strategy needs to move further upstream.
Manufacturers can no longer set a US price and then optimise each European market in isolation. If the price achieved in one market can influence MFN benchmarks or other countries' reference prices, the interaction between US and ex-US pricing has to be considered before launch and, for some assets, much earlier in development. That raises a more fundamental portfolio question: which markets does a manufacturer actually intend to launch in?
2. Confidential contracting becomes more important, but is not a complete solution.
Rebates can preserve a public list price while letting payers manage affordability, but governments may face growing pressure over transparency and budget impact. Manufacturers may not be able to assume every international-pricing mechanism treats confidential net prices identically. The UK arrangement shows governments increasingly have to weigh how domestic pricing interacts with US policy when negotiating access.
3. Europe's competitiveness challenge extends beyond the price it pays for medicines.
Recent US policy combines the pull of the world's largest pharmaceutical market with tax advantages, manufacturing incentives, and the leverage of potential tariffs, so European competitiveness discussions cannot focus solely on price. Manufacturing conditions, clinical-development infrastructure, regulatory predictability, and the speed of reimbursement will increasingly matter together.
Looking ahead in 2027
The US has not replaced its pricing system with a single international benchmark: MFN is being layered onto what already exists, and pricing policy now intersects with trade, tax, and manufacturing policy.
There is also a mismatch in horizons. Executive-led initiatives may change with the political cycle unless embedded in legislation. In contrast, the implementation of decisions related to manufacturing facilities, R&D investments, and global clinical development plans take place over a much longer timeframe. Companies must therefore make long-lived commitments against US policies whose durability may be considerably shorter. One year on, that asymmetry may itself be the central strategic lesson.
For Europe, the question is therefore no longer simply whether MFN will lower US prices. It is: As the world's largest pharmaceutical market increasingly connects the prices it pays with where companies invest and manufacture, how should Europe compete for the next generation of pharmaceutical innovation without compromising affordability and patient access to novel medicines?
About the authors
Jaehyuk Lee, MSc, is a senior business analyst at Lifescience Dynamics, specialising in oncology. He has supported clients across GYN and breast cancers, pan-tumour indications, GI and GU cancers, and B-cell malignancies. His expertise in competitive intelligence, market research, and market access helps clients evaluate portfolio opportunities and guide corporate strategy.
Eu Shen Seow, PhD, is a senior business analyst at Lifescience Dynamics with a Doctorate in Immunology. He has supported clients over a wide range of therapeutic areas, with a focus on immunology and rare diseases, and has over three years of experience in the competitive intelligence and market research fields.
Peter Kelly, PhD is a vice president at Lifescience Dynamics. He brings a diverse experience with 10+ years in biomedical science and 7+ years in the financial services consulting at the Bank of England. His work has been published in a wide range of scientific fields while at Stanford, Memorial Sloan-Kettering, and University College London. At the Bank, he led teams responsible for supervising systemically important financial institutions, which involved business model and strategic analysis. He was relationship manager for the Bank’s engagements with senior industry leaders and international bodies (e.g., US Federal Reserve).
