Tackling Drug Prices in the US (White Paper)

Table of content

1 Key Findings ………………………………………………………………………………………………………………………………………………………… 6

2 Current Pricing and Reimbursement Dynamics in the US ……………………………………………………… 8

2.1 US health system: general overview …………………………………………………………………………………………………………………8

2.2 Medicines pricing and reimbursement in the public healthcare system ……………………………………..11

2.2.1 Veteran’s Affairs ……………………………………………………………………………………………………………………………………………………………………… 11

2.2.2 Medicaid …………………………………………………………………………………………………………………………………………………………………………………….. 12

2.2.3 Medicare ……………………………………………………………………………………………………………………………………………………………………………………. 14

2.3 Medicines pricing and reimbursement in the private healthcare system ………………………………… 16

3 Inflation Reduction Act (IRA) and Maximum Fair Price (MFP) ……………………………………………….21

3.1 What is the Maximum Fair Price and which drugs have been selected?……………………………………. 21

3.2 How have developers in the US responded to the Maximum Fair Price prices? …………………….. 22

4 International Reference Pricing – US ……………………………………………………………………………………………….. 23

4.1 History of International Reference Pricing in the US ………………………………………………………………………………. 23

4.2 Most Favored Nation framework and Medicaid: GENEROUS model ………………………………………………. 25

4.3 Most Favored Nation framework and Medicare: GLOBE model versus GUARD model ………… 26

4.3.1 GLOBE model ………………………………………………………………………………………………………………………………………………………………………….. 27

4.3.2 GUARD model ……………………………………………………………………………………………………………………………………………………………………….. 28

4.4 International Reference Pricing model’s expected impact ……………………………………………………………….. 28

4.4.1 GENEROUS model ……………………………………………………………………………………………………………………………………………………………….. 29

4.4.2 GLOBE & GUARD models ……………………………………………………………………………………………………………………………………………….. 30

5 How does Most Favored Nation compare to International Reference Pricing in other key markets? ……………………………………………………………………………………………………………………………………………….. 32

5.1 What is the early US and European response to the Most Favored Nation policy? ………………. 345.1.1 Price increases for US medicines ……………………………………………………………………………………………………………………………….. 34

5.1.2 High price tag for US newly launched medicines …………………………………………………………………………………….. 35

5.1.3 Potential market entry delay …………………………………………………………………………………………………………………………………….. 38

5.1.4 Withdrawals in other pharmaceutical markets …………………………………………………………………………………………… 41

5.1.5 Price increases in markets outside the US ……………………………………………………………………………………………………… 43

5.2 Alternative pricing models – direct-to-consumer pricing ……………………………………………………………….. 44

6 Conclusions ……………………………………………………………………………………………………………………………………………………. 46

List of Tables

Table 1: Drugs selected for IRA Medicare price negotiations ……………………………………………………………………………………. 21

Table 2: GENEROUS model ………………………………………………………………………………………………………………………………………………………………….. 26

Table 3: GLOBE model …………………………………………………………………………………………………………………………………………………………………………….. 27

Table 4: GUARD model ………………………………………………………………………………………………………………………………………………………………………….. 28

Table 5: Countries that include the US in their reference basket ………………………………………………………………………… 34

Table 6: Sample 1 – Ex-manufacturer prices per unit ($/unit/mg) at launch comparison for innovative drugs approved after 2025, 5EU and US ………………………………………………………………………………………………………. 36

Table 7: Sample 2 – Ex-manufacturer Prices per unit ($/unit/mg) at launch comparison between Europe 5 and the US for drugs approved after January 2024 and one European market between May 2024 and May 2025…………………………………………………………………………………………………………………………….. 37

Table 8: Distribution of spending and percentage of products covered by Medicaid, Medicare Part B, Medicare Part D, and the VA ……………………………………………………………………………………………………………………………………………. 46

Table 9: Expected WAC price change estimated by GlobalData ………………………………………………………………………… 47

List of Figures

Figure 1: US Health System Overview ……………………………………………………………………………………………………………………………………………. 10

Figure 2: : Average percent difference (%) between WAC price and BIG4 price by drug type ………. 12

Figure 3: Average price difference (%) between WAC price and Medicaid (New York) by drug type ………………………………………………………………………………………………………………………………………………………………………………………………………………………. 13

Figure 4: Average Price Difference (%) Between WAC and ASP Price in the US by Drug type ………….. 15

Figure 5: Number of newly priced on-patent drugs per year, 2021–25 …………………………………………………………….. 17

Figure 6: Average time (days) to pricing and reimbursement for on-patent reimbursed medicines approved after 2020, 5EU and US ……………………………………………………………………………………………………………………….. 18

Figure 7: Comparison of the average price per strength for patent-protected oncology medicines, 5EU and US …………………………………………………………………………………………………………………………………………………………………………… 19

Figure 8: Distribution of HTA decisions in the US and Germany since the start of ICER and G-BA ………………………………………………………………………………………………………………………………………………………………………………………………………………………………… 20

Figure 9: The average percent difference per brand between WAC prices and MFPs, December 2025 …………………………………………………………………………………………………………………………………………………………………………………………………………………….. 22

Figure 10: The monthly average percentage change in WAC price per brand that applied price cuts for selected Medicare-negotiated products …………………………………………………………………………………………………………… 23

Figure 11: Key timeline of Most Favored Nation framework events ………………………………………………………………………. 24

Figure 12: Average percent difference per brand between WAC price and GENEROUS model-based price for top Medicaid drugs ………………………………………………………………………………………………………………………………………….. 29

Figure 13: Average percent difference per brand between WAC price and lowest ex-manufacturer price in GLOBE reference basket for top Medicare Part B drugs ………………………………………… 31

Figure 14: Average percent difference per brand between WAC price and lowest ex-manufacturer price in GUARD reference basket for top Medicare Part D drugs ……………………………………… 32

Figure 15: Distribution of countries using IRP by formula type ………………………………………………………………………………… 33

Figure 16: Distribution of reference basket sizes………………………………………………………………………………………………………………… 33

Figure 17: Average Q1 WAC price change (%) for Pfizer products that are included under Medicare Part B ………………………………………………………………………………………………………………………………………………………………………………………….. 35

Figure 18: Launch price (USD) of Lynozyfic (200 mg x 1 unit) in the US versus Germany …………………….. 38

Figure 19: Average launch sequencing for the US and IRP Guard and Globe countries ……………………. 39

Figure 20: Number of new product launches per GENEROUS/GLOBE/GUARD market, pre- and post-MFN executive order announcement ………………………………………………………………………………………………………………………….. 40

Figure 21: Ex-manufacturer historical prices (USD) – Repatha (evolocumab, 140 mg x 2 units) – US and Denmark ……………………………………………………………………………………………………………………………………………………………………………………….. 42

Figure 22: Average number of brands with at least one pack withdrawn in Europe, pre- and post-MFN executive order announcement ………………………………………………………………………………………………………………………….. 43

Figure 23: Top 20 products with the greatest average percentage difference per brand between the WAC price and DTC price listed on the TrumpRx platform ………………………………………………………. 45

Figure 24: Example of statement from TrumpRx platform of “most favored nation” price, Gonal-F, 450 IU, pen…………………………………………………………………………………………………………………………………………………………………………………………………. 48