When prices travel: How Most Favored Nation and international reference pricing are reshaping global market access

• Basket size, or the number of reference countries included; 
• Referencing application — whether only at launch or updated periodically; 
• Benchmark methodology, such as average, median, or lowest price; 
• Adjustment factors, such as purchasing power parity, to account for differences in the general cost of living across countries and for exchange-rate considerations;
• Price level referenced (ex-manufacturer or wholesale price).

IRP policy change is common, and some countries in Europe have sought to shift away from it. One such example is Germany, which recently amended its Medical Research Act to introduce optional confidential discounted reimbursements so companies could keep their reimbursement price negotiations with statutory insurance funds private, and therefore not jeopardise their negotiations with other countries. 

Many questions about how MFN will be applied and its longer-term impact remain. What is known is that MFN, which President Trump issued as an Executive Order in May 2025, seeks to tie US drug prices to those in similarly developed countries.

In December 2025, Centers for Medicare & Medicaid Services (CMS) published the Global Benchmark for Efficient Drug Pricing (GLOBE) Model and the Guarding US Medicare Against Rising Drug Costs (GUARD) Model as mandatory IRP-style initiatives, using a 19-country reference basket for MFN benchmarking. 

Both GLOBE (Medicare Part B) and GUARD (Medicare Part D) include two IRP benchmarks: a default CMS-derived international benchmark that is based on international pricing data sources, and an optional manufacturer-submitted volume-weighted average net price benchmark.

The administration has also introduced a voluntary CMS model called GENEROUS (GENErating cost Reductions fOr US Medicaid), which adjusts Medicaid pricing based on manufacturer-reported average prices from 8 countries: the United Kingdom, France, Germany, Italy, Canada, Japan, Denmark, and Switzerland.

How GUARD and GLOBE will evolve remains uncertain, as both are proposed models covering 25% of their respective Medicare populations, equivalent to roughly 5% of the US population, given that Medicare covers approximately 20% of the population; however, the share may be larger in Medicare-concentrated therapeutic areas. The impact of GENEROUS, meanwhile, will depend on how many states and manufacturers choose to participate. Beyond Medicare and Medicaid, MFN’s implications across the US healthcare ecosystem remain uncertain.