Beyond “Most Favored Nation” Drug Pricing: What the U.S. Can Learn from Other Countries
The U.S. is debating Most Favored Nation (MFN) drug pricing, which ties U.S. drug prices to those paid in other countries. Research from the Commonwealth Fund examines how six health systems manage access to high-cost medicines and finds that price differences reflect institutional design rather than just international price benchmarks.
The U.S. is considering Most Favored Nation (MFN) drug pricing, which links U.S. prices to those in other countries. The Commonwealth Fund researched how Australia, Canada, England, France, Germany, and Sweden manage high-cost medicines. These countries assess medicine value, negotiate prices collectively, and manage uncertainty about long-term outcomes. They use external reference pricing as a supporting tool, not the primary policy. The World Health Organization recommends combining external reference pricing with strong analytic capacity and price negotiation. Lower prices are achieved through formal processes for assessing value and negotiating accordingly, not just referencing what others pay.
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