International Reference Pricing: Impacts on Pharma Access

October 6, 2025

Introduction – U.S. Drug Pricing Reform and the MFN Executive Order

On September 30th, 2025, the Trump administration announced a breakthrough agreement with Pfizer – the first of its kind under the Most Favored Nation (MFN) Executive Order that may result in the slow march of prescription volume away from pharmacy benefit managers (PBMs) and health plans. Under this agreement, all state Medicaid programs will be able to access MFN pricing on Pfizer products. Furthermore, Pfizer has agreed to offer MFN prices on all future innovative drugs, reinvest foreign revenue into the U.S. market, and provide deep discounts off list prices for direct-to-patient (DTP) distribution.

To facilitate this, Pfizer drugs will be made available through a new government-operated website coined “TrumpRx” that is expected to launch in 2026. Pfizer products are projected to be 50% lower on average, but only for patients not using health insurance. While this can make drugs more affordable for patients without any insurance, insured patients may pay more through this pathway than they would at the pharmacy counter as the discounts are based on high list prices.

Aimed to reduce the cost of pharmaceuticals in the U.S., MFN risks a shift away from a market-based framework that balances affordability, access, and innovation toward a more cost-centric approach that prioritizes the lowest price. Unlike the well-established international reference pricing (IRP) systems currently used in over 75 countries, the proposed MFN approach to IRP is far more aggressive, less defined, and unpredictable. MFN benchmarks U.S. drug pricing to the lowest list price in economically comparable countries, shifting the focus away from therapeutic value, broader health outcomes, or market dynamics and instead focusing on price comparisons alone.

This heightened focus on price exposes the global pharmaceutical industry to a variety of unintended consequences – many of which could have a profound impact on access, innovative therapeutic landscapes, and market stability. These include:

Global Launch Delays and Market Access Impact

To offset the impacts of IRP in the U.S., manufacturers may delay, withdraw, or avoid launches in reference countries with historically lower drug prices to avoid setting a low benchmark that would erode the price in the U.S.

Infographic on IRP and MFN impacts: Left shows case studies of reduced access in Germany and Europe; right outlines MFN effects like delays and inequities.

Parallel Trade and Supply Risks in Reference Markets

The free movement of goods in the EU enables medicines to be redirected from lower-priced markets and sold in higher-priced markets, making it challenging for manufacturers to control where and at what price their product is sold at.

Two-column infographic on IRP and MFN impacts: Left highlights case study of supply shortages in Portugal, Greece, and CEE; right outlines MFN risks like importation issues and forecasting complexity.

Price Convergence and Confidential Discounts

To maintain revenue, manufacturers may try to increase list prices in reference countries to be in range of U.S. prices. While price referencing can improve short-term budget savings, it risks long-term price convergence around the high-income markets rather than achieving long-term cost control.

To protect U.S. pricing, manufacturers may try to inflate list prices in reference countries (as mentioned above) while providing steeper discounts and rebates, creating a wider gap between list and net prices and increasing lack of transparency.

Two-column infographic on IRP and MFN impacts: Left details European market case studies, including price corridors and proposals for EU-wide pricing; right highlights MFN effects like affordability challenges and price alignment with U.S. markets.

Two-column infographic on IRP and MFN impacts: Left highlights UK and Germany case studies, including price increases and policy changes; right outlines MFN effects like pricing gaps, reduced transparency, and stockpiling risks.

Impacts on Innovation and R&D Investment

The U.S. market currently underwrites a substantial proportion of dollars invested into global pharmaceutical R&D. With those dollars no longer in the industry, pharmaceutical manufacturers will struggle to maintain an innovative therapeutic landscape.

Two-column infographic on IRP and MFN impacts: Left highlights case studies from Canada and the UK, including reduced trials and R&D relocation; right lists MFN effects like delayed trials, reduced investment, and job losses.

Adapting Pharma Strategy in a Post-MFN Era

The U.S. Most Favored Nation policy represents a pivotal shift toward international reference pricing within the world’s largest pharmaceutical market. Lessons from established IRP systems underscore the risks of aggressive price benchmarking – delayed launches in lower-priced markets, reduced price transparency, and diminished R&D investment. If implemented, MFN could accelerate global price convergence towards U.S. prices and fundamentally alter how innovation is valued and introduced across geographies.

Pharmaceutical manufacturers will need to rethink evidence planning, pricing corridors, and launch sequencing to maintain viability in this new environment. A comprehensive, data-driven strategy – one that integrates clinical, economic, and market access insights – will be essential. Through its global expertise in pricing and reimbursement, Certara partners with industry leaders to model these impacts, strengthen access strategies, and preserve innovation amid rapidly evolving policy conditions.

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Need help assessing the potential impact of the ‘Most Favored Nation’ drug pricing policy? Certara’s Market Access, Pricing and Reimbursement experts are standing by to offer their perspective as you consider strategies across your global portfolio.

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Frequently Asked Questions (FAQs)

What is international reference pricing in pharmaceuticals?

International reference pricing (IRP) is a cost-control mechanism where a country benchmarks its drug prices to those in other countries, often selecting the average or median price among reference markets. The U.S. “Most Favored Nation” executive order is a proposed version of this approach but instead references the lowest price.

How does the Most Favored Nation policy differ from existing international reference pricing models?

While most countries use IRP in some form, the MFN policy is more aggressive; it directly ties U.S. prices to the lowest available price in comparable countries, with fewer guardrails to balance affordability and innovation.

What does the MFN policy mean for pharmacy benefit managers (PBMs)?

The MFN approach, coupled with direct-to-patient programs facilitated through TrumpRx, a new government-run website where U.S. consumers can search and be redirected to purchase the discounted medicine directly from the manufacturer, could shift prescription volume away from PBMs and traditional health plans, disrupting current reimbursement and distribution models.

What are the unintended consequences of international reference pricing?

Potential consequences include delayed launches in lower-priced markets, product withdrawals, parallel trade leading to supply shortages, increased confidential discounting, and reduced global R&D investment.

How could the MFN policy impact pharmaceutical market access strategies?

Companies may prioritize launches in higher-priced markets, delay entry in lower-priced countries, or restructure pricing corridors to protect U.S. revenues. Market access teams will need to adapt launch sequencing and pricing negotiations accordingly.

Jamie Thon

Senior Analyst

Jamie Thon, MSc is a Senior Analyst within Certara’s Evidence and Access Group. She joined Certara in 2025 and brings experience in pharmaceutical market access strategy, pharmacology, and research in both academic and commercial settings.

Prior to joining Certara, Jamie was a Market Access Associate at a Canadian market access consultancy firm, where she assisted pharmaceutical manufacturers in optimizing reimbursement outcomes. She has worked across a broad range of therapeutic areas, including oncology, cell and gene therapy, rare diseases, and ophthalmology. She also conducted detailed market landscape assessments and provided strategic recommendations tailored to internal business objectives and external policy trends.

Jamie holds an MSc in Applied Clinical Pharmacology from the University of Toronto, where she gained advanced training in drug development, clinical trial design, pharmacodynamics and pharmacokinetics. During her time there, she served as a teaching assistant and completed research at the Center for Mental Health and Addiction (CAMH) on novel cannabinoid biomarker methodologies. She earned her BSc in Biomedical Sciences from McGill University, majoring in Microbiology and Immunology with a minor in Pharmacology.

References

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U.S. International Reference Pricing: Global Implications and Pharma Strategy