The Trump administration contends MFN drug pricing is necessary and overdue given its belief that the US has financed biopharmaceutical innovation consumed by the rest of the world. This doctrine stems from its empirical view that pricing is often highest in the US market, where life science companies realize sizable returns on R&D investments.

MFN ties US drug pricing to the lowest price a manufacturer sets in comparable developed nations. Trump Executive Order 14297 (May 2025) and Proclamation 11020 (April 2026) compelled drugmakers to choose between (A) facing a 100% tariff, (B) committing to domestic production to reduce that tariff to 20%, or (C) both committing to domestic production and signing the HHS MFN Agreement, which would eliminate the tariff altogether through January 2029. As of today, 17 big pharma companies, representing ~85% of the US branded drug market, have signed the MFN Agreement. We expect that several mid-sized players will sign the Agreement as well, possibly as soon as August 31.

The pricing environment though remains in flux, difficult to enforce, recondite, and opaque. It is at the manufacturer’s discretion to enter into MFN. Congress has not codified MFN. Enforcement is untested. Courts have challenged the constitutionality of unilateral executive decrees on tariffs, and the next presidential administration can dissolve MFN with a pen stroke.

Even so, MFN has already impacted market dynamics globally. US prices for certain drugs have been pulled down, while international prices in developed markets have been pushed up, with cascading ripple effects on patient access and payor formulary decisions. At ISPOR Europe 2026, a keystone panel will review heightened concerns that drugmakers are delaying or deprioritizing European launches to protect global pricing corridors. Certara recently released a pulse-check paper that reports that 54% of surveyed market access professionals have experienced accelerating demand for pricing studies amidst MFN.

In our view, the most likely steady-state outcome will be a gradual convergence of drug pricing over time, with meaningful pockets of inaccessibility in certain regions where the economics no longer warrant coverage.

Price can no longer be optimized by regional market, and instead, drug manufacturers need to demonstrate that the price point is justified on its comparative overall economic merit (inclusive of direct and indirect costs and benefits versus the standard of care).

This challenge will become even more pronounced as portfolios shift toward expensive cell, gene, and other advanced therapies. One of the central questions for late-phase drugs approaching commercial launch then is to what extent the price points can be defended, with key implications for life science companies, patients, payors, providers, and society at large.

The Economic Case for Every New Branded Drug Has to Be Proved