Europe has spent decades treating U.S. drug pricing as a distant spectacle: complex, expensive, and ultimately disconnected from how medicines are priced and accessed on this side of the Atlantic. Trump’s Most‑Favored‑Nation (MFN) drug‑pricing order challenges that comfort. It explicitly frames the U.S. as paying more than “similar nations” and directs the Administration to push U.S. prices toward the lowest prices in comparable developed countries, while also signalling escalation if manufacturers do not deliver “significant progress.”
The geopolitical implication is straightforward: European pricing outcomes are being positioned as a tool of American cost containment. HHS has publicly reinforced this approach, stating expectations that manufacturers align U.S. pricing for certain brand products with the lowest price among an OECD peer set using a GDP-per-capita threshold. For pharma companies, that turns what used to be a “local” discount decision in one Member State into a potential global pricing liability.
Key Takeaways
- Europe’s lowest prices risk becoming U.S. reference points, increasing the strategic cost of deep EU concessions.
- Launch sequencing will become more defensive – especially for products where U.S. revenue is decisive.
- Discount confidentiality moves from “nice to have” to “strategic necessity”, as MFN logic penalizes visible or inferable low prices.
- Pricing becomes a geopolitical risk category, not merely a market-access function
- Implementation is uncertain and contested, and broad claims of immediate savings are not guaranteed: meaning companies should plan for volatility rather than clarity.
MFN is not just reimbursement policy it is a geopolitical signal
The executive order’s framing is not subtle. It argues that Americans subsidize global pharmaceutical profits and that foreign systems benefit from lower prices while the U.S. pays more, positioning MFN as a corrective to “global freeloading.” This is the language of industrial strategy and trade grievance, not a narrow healthcare adjustment. It matters because it expands the battlefield: drug pricing can be treated as a geopolitical imbalance rather than a domestic budget choice.
Crucially, the policy architecture does not rely solely on voluntary market dynamics. The EO directs federal action – price target communication, potential rulemaking, and broader agency involvement – designed to shift bargaining power, not merely encourage better deals.
Europe becomes part of the U.S. pricing mechanism – whether it likes it or not
HHS’ follow-on statement clarifies the operational direction: manufacturers are expected to align U.S. pricing for certain brand products with the lowest price among an OECD peer set meeting a GDP-per-capita threshold. The MFN “OECD peer set” is not a fixed list of countries. According to the U.S. HHS/ CMS guidance and the Congressional Research Service analysis, the MFN benchmark price is defined as: “the lowest price in a country that is part of the OECD and has a GDP per capita of at least 60% of the U.S. GDP per capita.”
This means the peer set is dynamic and depends on which OECD countries meet the 60% GDP-per-capita threshold in a given year.
For 2024 this would have meant:
That is the hinge point for Europe. Under a “lowest price” logic, small markets with aggressive discounting can become the anchor for global price compression.
This is where the EU’s internal fragmentation becomes a vulnerability. The U.S. is one negotiating arena; Europe is 27 pricing regimes. A single low outcome in one Member State – especially if it becomes visible or inferable – can create outsized external consequences under MFN-style referencing.
The “hidden front”: trade, coercion, and foreign “price suppression” narratives
The EO and accompanying materials explicitly direct agencies such as USTR and Commerce to address foreign practices that allegedly suppress prices and contribute to U.S. price differentials. This is not a technical add-on; it signals that pricing may migrate into trade-style negotiations and pressure tactics. Even if no immediate trade measures materialize, the posture alone changes Europe’s strategic environment: European price control is no longer framed as sovereign health policy, it can be framed as a contributor to U.S. domestic affordability problems.
What this means for pharma companies
Launch sequencing becomes price‑protection strategy
If U.S. pricing targets are pegged to the lowest price in a peer set, early launches in traditionally low-price markets become more dangerous. HHS’ description of MFN targets as the lowest price among peer countries incentivizes companies to avoid creating “low anchors” before U.S. pricing corridors are secured.
What companies should examine now
- Low-anchor market mapping: identify which EU countries most frequently generate the lowest observable prices in your therapeutic area.
- Sequencing stress tests: model the scenario where one EU net outcome effectively lowers U.S. targets and compresses global revenue.
- Phased rollout designs: narrower initial indications, staged supply, or delayed “full launch” in discount-heavy markets to protect price integrity.
Expected consequence: more cautious and slower European rollout patterns, particularly for high-value specialty products where U.S. pricing remains critical.
Discount strategy tightens—and confidentiality becomes mission-critical
European market access often relies on rebates, managed entry agreements, and tender discounts. MFN logic, by contrast, punishes the existence of a “lowest price,” whether list-based or inferable through procurement dynamics.
What to review
- Contract leakage risk: internal handling of discount schedules, side letters, and cross-affiliate visibility.
- Referenceability clauses: stronger provisions limiting disclosure and external referencing, given MFN’s comparative pricing posture.
- Tender discipline: aggressive bids may win local access but create low benchmarks that become strategically costly under “lowest peer price” targeting.
- The practical bottom line is not philosophical: price corridors narrow, and “buying access” with deep concessions becomes less viable if it risks pulling down the U.S. ceiling.
U.S. contracting and policy posture becomes a pricing variable
The EO sets a pathway: communicate MFN targets; if progress is insufficient, move toward rulemaking; and contemplate other measures (including concepts around direct purchasing). HHS messaging similarly frames expectations for manufacturer commitments and potential “action” if they do not align pricing.
What pharma teams should do
- Segment exposure by channel: identify products heavily exposed to U.S. federal reimbursement and thus more sensitive to MFN implementation choices.
- Portfolio triage: distinguish assets where U.S. price integrity is existential from those where broad global volume is strategically prioritised.
- Engagement strategy: decide whether voluntary commitments, selective alignment, or alternative access mechanisms might reduce political risk.
At the same time, external observers have cautioned that broad claims of immediate systemwide savings are uncertain and depend on details not yet fully transparent, meaning the policy environment may be volatile and iterative rather than stable.
Governance needs an upgrade: pricing becomes geopolitical risk
Because the EO explicitly draws in trade and commerce narratives, pricing moves closer to a board-level geopolitical risk category, alongside supply chain and trade exposure. This demands cross-functional governance.
Recommended governance
- A “pricing geopolitics” group combining market access, legal, compliance, public affairs, and supply chain.
- Scenario planning that goes beyond “will this survive court challenges” to “how will EU pricing behavior and U.S. political incentives interact over time.”
Legal and implementation considerations
The implementation path is real and legally contested territory
The EO contemplates a sequence: (i) MFN price targets communicated to manufacturers, (ii) if insufficient progress, rulemaking to impose MFN pricing “to the extent consistent with law,” and (iii) additional measures referenced within the EO framework. HHS has publicly stated it is taking steps to implement the EO and has articulated how it expects to define the MFN target price (lowest price among qualifying OECD peers).
However, MFN is not entering a blank legal landscape. The concept resembles earlier attempts to tie Medicare payments to international prices, including initiatives from Trump’s first term that faced legal and procedural challenges, and later rescission under a subsequent administration. The Congressional Research Service has highlighted legal questions around HHS authority and the complexities of applying MFN concepts across federal programs and potentially private markets.
Why uncertainty will persist (and why that matters commercially)
Even sympathetic analysts note the EO does not automatically translate into immediate broad-based price reductions without detailed implementation; the policy’s real-world effect depends on how agencies define scope, apply authority, and withstand legal scrutiny. Independent fact-checking and reporting have also emphasized that early “MFN” claims of sweeping price drops are not guaranteed and that many details remain unclear—making volatility a rational expectation for industry planning.
For pharma, this means: plan for the linkage even if the final mechanism shifts. The attempt to connect U.S. prices to international benchmarks is itself enough to reshape launch and discount incentives.
A 30–90 day pharma action checklist (practical, not theoretical)
- Pricing & Launch
- Map “lowest‑price anchor risk” by country and product class.
- Re-run launch sequencing under MFN scenarios (EU low anchor → U.S. ceiling compression).
- Establish tender guardrails for categories likely to be sensitive to MFN-style referencing.
- Contracts & Confidentiality
- Audit MEAs/rebate structures for leakage and referenceability exposure.
- Governance
- Create cross-functional MFN governance and board reporting; treat pricing as geopolitical risk.
Conclusion: the border between markets has been replaced by feedback loops
Europe can continue to insist that its pricing model is a matter of national sovereignty. But sovereignty looks different when Washington attempts to index U.S. reimbursement ambition to European benchmarks and frames foreign pricing as part of the American affordability problem. The old world had clearer borders between markets. The new world is built on feedback loops, where one low European anchor can ripple outward into global pricing corridors.
The immediate question for pharma is not whether MFN will survive in precisely its current form. The more urgent question is whether companies adapt quickly enough to a world in which European pricing decisions increasingly shape U.S. pricing politics and therefore reshape launch strategy, discount discipline, and access outcomes across Europe.
About DORDA’s Health & Life Science Group
DORDA’s Health & Life Science Group advises national and international companies across the full lifecycle of pharmaceuticals, biotech products, medical devices, MedTech and digital health—combining deep regulatory expertise with strategic market access and compliance capabilities. We support clients from development planning and clinical strategy through authorization, post-approval obligations, advertising and distribution frameworks, and crisis response – particularly where European and transatlantic regulatory dynamics intersect.
Francine Brogyányi
Managing Partner, DORDA
Head of the Dedicated Industry Group Health & Life Science
Francine Brogyányi is recognised as one of the leading Life Sciences law experts in Austria and the EU. She advises companies across pharma, biotech, MedTech and digital health on regulatory, compliance and strategic matters throughout the entire product lifecycle, with a focus on helping innovative products reach patients in a timely and responsible manner.