The Global Impact of US Medicine Pricing: Who Really Pays?

If companies raise prices elsewhere to protect US revenue, the benchmark rises with them, US savings shrink, and payers in other countries pick up more of the bill.

In May 2025, the US government introduced a policy known as Most Favoured Nation (MFN) pricing. The aim is to reduce the price of prescription medicines in the US by comparing what they cost in other developed countries. The principle is simple: why should the US pay significantly more for the same medicine than other countries?

However, while the policy is intended to make medicines more affordable for patients in the US, it could have wider consequences for pharmaceutical companies, healthcare systems and patients around the world. 

How does it work?

Under MFN pricing, the US uses medicine prices in other countries to help determine what it should pay.  The US government has identified 19 countries whose prices could be used as a comparison. If a medicine costs more in the US than the agreed benchmark, pharmaceutical companies may be required to offer discounts or repay some of the difference.

These changes are being introduced through programmes covering Medicaid, which provides healthcare for eligible people on low incomes, and potentially Medicare, which mainly supports people aged 65 and over. Two proposed Medicare programmes, GLOBE and GUARD, would extend this approach, although the final details have yet to be confirmed.

Why does this matter for pharmaceutical companies?

The US is an important market for pharmaceutical companies, and medicine prices there can have a significant impact on their global revenues.  If US prices are linked to those in other countries, agreeing to a lower price in Europe could also reduce what a manufacturer can charge in the US.

This creates a difficult decision for manufacturers. They may become more cautious about offering lower prices or delay launching medicines in countries where prices are traditionally lower.  The US has also introduced additional import tariffs, or taxes, on certain medicines manufactured overseas. Some companies can reduce or avoid these tariffs by agreeing to US pricing arrangements or manufacturing in the US. Together, these measures increase pressure on companies to reconsider their global pricing and launch strategies.

What does this mean for the UK?

The UK has already made changes to the way it assesses and pays for new medicines, agreed alongside its pricing and trade arrangement with the US in December 2025, which also secured a 0% US tariff on UK medicines.

In April 2026, the National Institute for Health and Care Excellence (NICE), which decides whether medicines offer good value for NHS use in England, increased the amount it would normally consider acceptable to pay for the health benefits of a treatment.

NICE uses a measure called a quality-adjusted life year (QALY). This considers both how much a treatment may extend a patient's life, and the quality of life lived.

Previously, NICE considered treatments acceptable if they cost between £20,000 and £30,000 for each additional year of good-quality life. This has increased to £25,000–£35,000. In practical terms, this means some medicines previously considered too expensive may now be approved for NHS use.

The UK has also agreed changes to its pharmaceutical pricing arrangements, including limits on the repayments manufacturers make to the government. These changes could make the UK a more attractive market for manufacturers and improve patient access to new treatments.

One example is ENHERTU®, a treatment for certain patients with advanced breast cancer. Following an earlier rejection on cost grounds, the medicine became available through the NHS in England in September 2026.

What does this mean for the EU?

The EU faces similar challenges, but with an added complication: each member country makes its own decisions about medicine prices and whether treatments will be funded through its healthcare system.

Many EU countries also compare medicine prices with those in other European countries when negotiating what they will pay. This means a lower price in one country can influence prices elsewhere, potentially affecting what companies can charge in the US.

As a result, manufacturers may seek higher prices across the EU or delay launching medicines in countries where prices are lower. This could increase pressure on healthcare budgets and mean patients wait longer for new treatments.

Access to medicines already varies significantly across the EU. The European Federation of Pharmaceutical Industries and Associations’ (EFPIA) Patient WAIT survey reported in May 2026 that patients wait an average (median) of 532 days for new medicines to become available, although this varies considerably between countries.

The European Commission is now examining how the new US pricing policy could affect medicine prices, launches and patient access across the EU. The full impact is not yet clear.

Could medicines become more expensive elsewhere?

Potentially. If pharmaceutical companies increase prices in other countries to protect their US revenues, healthcare systems outside the US could face higher costs. And if prices rise internationally, the benchmark used to calculate US prices could rise too, reducing the savings the policy was designed to achieve.

There is also a risk that companies delay launching new medicines in lower-priced markets to avoid affecting the prices they can achieve elsewhere. This could mean patients in some countries wait longer for access to new treatments.

What happens next?

MFN pricing could change how pharmaceutical companies decide where and when to launch new medicines.  Companies will need to consider how pricing decisions in one country affect their commercial opportunities in others.

We may also see greater use of confidential pricing agreements, where pharmaceutical companies negotiate discounts with individual healthcare systems without publicly disclosing the final price. However, there are still uncertainties. Some US pricing programmes remain proposals, and there is limited public evidence so far that MFN agreements have significantly reduced US medicine launch prices.

For the pharmaceutical industry, pricing and market access decisions are becoming increasingly connected across countries. Understanding these relationships will be essential to protecting commercial value while ensuring patients can access the treatments they need.

At Solaris, our pricing and market access team works on international reference pricing and launch sequence optimisation, helping companies plan prices and launches as policies like MFN connect prices across countries.

If MFN is changing how you think about launch order or European prices, email tim.gamble@solarishealth.com