Drug pricing: why international reference may not work for the United States

The U.S. government under President Trump proposed in 2025 a “Most-Favored Nation” (MFN) model, aiming to benchmark domestic drug prices against those in other developed countries through international reference pricing (IRP). However, a recent commentary in Value in Health argues that such an approach may create more harm than benefit.

In Europe, IRP delivered only short-term budget savings. Over time, list prices converged with those of high-income “anchor” countries such as Germany and France, without true long-term reductions. This mechanism also delayed or restricted access to innovative medicines in less affluent countries, forcing payers to adopt confidential, non-transparent pricing agreements with manufacturers.

According to the authors, implementing MFN in the U.S. could make the country the new global reference point for drug prices. This shift may drive pharmaceutical companies to set even higher launch prices to offset potential revenue losses. Such dynamics risk undermining incentives for innovation and worsening inequities in drug access worldwide.

As a more sustainable alternative, the commentary suggests that the U.S. should strengthen its own health technology assessment (HTA) frameworks. By systematically evaluating clinical benefit, cost-effectiveness, and societal willingness to pay, HTA mechanisms could offer more rational and predictable drug pricing decisions, avoiding the pitfalls observed in Europe.