Tag: life sciences

Insights

Most Favored Nation (MFN) Drug Pricing: Market Access Implications and Manufacturer Preparedness

What Is MFN?

A Most Favored Nation (MFN) drug pricing policy would tie certain U.S. drug prices (most likely within Medicare) to the lowest price paid for the same product in a basket of comparable, economically advanced countries.

Rather than relying solely on domestic benchmarks such as Average Sales Price (ASP), MFN models use international reference pricing (IRP) to cap U.S. reimbursement levels

While MFN is not currently in effect, variations of the policy have been proposed multiple times and remain a recurring theme in federal drug pricing discussions. In a post-IRA environment where Medicare negotiation is already reshaping pricing dynamics, MFN represents a potential next phase of pricing reform.

Why MFN Matters for Market Access

MFN is not simply a pricing policy. It fundamentally changes the interplay between global pricing strategy and U.S. access dynamics.

Historically:

  • U.S. pricing has been largely insulated from international pricing decisions
  • Market access strategy in the U.S. focused primarily on payer mix, contracting, and value demonstration domestically

Under MFN:

  • Global pricing decisions directly influence U.S. reimbursement
  • Ex-U.S. launch sequencing and pricing strategy become U.S. access decisions
  • Market access planning must shift from domestic optimization to global coordination

This creates both operational complexity and strategic risk.

Key Market Access Impacts

1. Global Launch Sequencing Becomes a U.S. Access Lever

If U.S. Medicare reimbursement is pegged to the lowest international price:

  • Early lower-price agreements in EU markets could reduce U.S. reimbursement ceilings
  • Delays in ex-U.S. launches may become more common
  • Manufacturers may prioritize price stability over speed to global access

Market Access Implication:
Launch sequencing, traditionally a commercial strategy decision, becomes a critical component of U.S. access preservation.

2. Increased Pressure on Gross-to-Net Strategy

MFN could effectively cap top-line pricing:

  • Reduced flexibility to offset domestic rebates with higher list prices
  • Potential compression of net revenue if international reference prices are significantly lower
  • Greater scrutiny of contracting structures across both Medicare and commercial segments

Market Access Implication:
Manufacturers will need tighter integration between pricing, contracting, and policy teams to manage cross-market impacts

3. Impact on Medicare Negotiation Leverage

If MFN is layered onto IRA price negotiation:

  • The “maximum fair price” ceiling could be influenced by international pricing floors
  • Negotiation dynamics may shift toward even greater federal leverage
  • Therapeutic classes with strong ex-U.S. HTA pressure (e.g., oncology, immunology) could see disproportionate exposure

Market Access Implication:
Access teams must prepare for negotiations that incorporate international comparators more explicitly and aggressively.

4. Formulary and Utilization Management Ripple Effects

Lower Medicare reimbursement rates could:

  • Change buy-and-bill economics in Part B
  • Affect provider margin and prescribing behavior
  • Influence payer formulary positioning in Part D

If margins compress:

  • Providers may prefer alternative therapies with better economics
  • Access hurdles may increase if plans attempt to offset reimbursement compression elsewhere.

Market Access Implication:
Manufacturer field reimbursement and provider engagement strategies will need to adapt quickly

Manufacturer Decision-Making Under MFN Risk

Even before implementation, MFN risk affects strategic planning. Manufacturers should be incorporating MFN into scenario modeling now

1. Portfolio Risk Stratification

Companies should assess:

  • Which assets are most exposed to international price referencing?
  • Which therapeutic areas face the largest EU-U.S. price deltas?
  • Which products are most Medicare-dependent?

This enables:

  • Prioritized mitigation planning
  • Revenue-at-risk modeling
  • Earlier lifecycle management interventions

2. Integrated Global Pricing Governance

MFN requires tighter alignment across:

  • U.S. market access
  • Global pricing & reimbursement
  • Government affairs
  • Legal and compliance

Decisions that were once siloed (e.g., a German price agreement) may have direct downstream U.S. impact

Prepared organizations will:

  • Establish formal cross-market price governance committees
  • Model international pricing agreements before execution
  • Create scenario playbooks for reference price compression

3. Enhanced Economic Value Demonstration

As pricing ceilings tighten, value demonstration becomes even more critical:

  • Stronger real-world evidence (RWE)
  • More robust health economic modeling
  • Outcomes-based contract readiness
  • Clear differentiation from therapeutic alternatives

Under MFN, margin compression increases the importance of maintaining favorable access tiers and minimizing utilization restrictions.

4. Contracting Innovation and Risk Sharing

If top-line pricing flexibility narrows:

  • Manufacturers may shift toward outcomes-based agreements
  • Indication-specific pricing may gain traction
  • Population health-based contracting could become more common

Access teams should be developing infrastructure now to support:

  • Data collection and analytics
  • Outcomes measurement
  • Performance-based reimbursement models

5. Scenario Planning and Financial Modeling

MFN preparedness requires:

  • Modeling various international basket configurations
  • Estimating price floors under different country mixes
  • Stress-testing gross-to-net assumptions
  • Evaluating provider economics impact (especially in Part B)

This modeling should inform:

  • Investor communications
  • Portfolio prioritization
  • Pipeline investment decisions

Preparedness Checklist for Market Access Teams

Manufacturers should consider the following actions:

Strategic Planning

☐ Conduct MFN exposure modeling by product

☐ Quantify Medicare revenue at risk

☐ Map international price differentials across key markets

Governance

☐ Formalize cross-market pricing review processes

☐ Establish escalation protocols before signing major ex-U.S. agreements

☐ Align U.S. and global access leadership

Evidence & Value

☐ Strengthen RWE generation plans

☐ Prepare enhanced HEOR dossiers

☐ Expand outcomes-based contracting readiness

Operational Readiness

☐ Assess provider reimbursement impact

☐ Update field reimbursement training

☐ Develop payer communication strategies

MFN may or may not materialize in its current form, but the direction of travel in U.S. drug pricing policy is clear: increased scrutiny, global benchmarking, and tighter reimbursement controls. Organizations that wait for final rules before acting risk being structurally unprepared.

Is your portfolio exposed to MFN risk?

At Danforth Health, we work with manufacturers to model policy exposure, align global and U.S. pricing strategy, pressure-test access assumptions, and build practical readiness plans. If MFN, or broader international reference pricing, would materially affect your portfolio, now is the time to assess your exposure and build a coordinated response.

Schedule a conversation with our experts to evaluate your MFN exposure and build a readiness strategy.

Insights

Commercial Planning: Building the Right Launch Team & Governance Model

Expert insights from Asymmetry Group, a Danforth Health Company

Product launches are amongst the most complex undertakings for biopharma companies—and there’s no shortcut to success. No matter how strong your strategy or detailed your plan, success ultimately depends on people. If you don’t have the right team in place, even the best-designed launch will fall short. That’s why launch governance and team structure aren’t just operational necessities; they’re strategic levers. Organizations that invest in building a high‑performing launch team and a governance model tailored to their unique needs don’t just execute—they create a competitive advantage.

Several considerations will shape your launch team structure and governance—and directly influence who you select, how the team operates, and what support they’ll need:

1) Launch Experience 

Is this your company’s first launch? How much launch experience exists within your organization?

Implications: Internal experience will impact the level of expertise required on the team, whether you need to bring in external support, and how much structure and oversight your governance model must provide.

2) Desired Launch Team Dynamics

To what extent do you expect your team to operate as an integrated, cross‑functional group? Is this consistent with your current culture?

Implications: Your desired team dynamic will shape role selection, behavioral expectations, and whether new ways of working are needed to enable strong cross‑functional collaboration. Even if you have a highly experienced launch team, it’s likely the first time THIS TEAM is launching together.

3) Organizational Decision-Making

How does your organization collaborate and make decisions? Is authority centralized or shared across empowered teams? Are decisions made quickly or more slowly?

Implications: Existing decision-making patterns will inform governance design—defining authority levels, escalation pathways, meeting cadence, and required functional representation to maintain momentum. And then it’s up to the organization to live these decisions to create trust and efficiency.

4) Partnerships 

Are external partners involved in the launch? What is the structure of the relationship, and how could it affect planning and execution?

Implications: Partnership arrangements will influence team composition, require clearly defined roles and responsibilities, and may necessitate additional coordination or joint governance mechanisms.

    While there’s no single approach to structuring your launch team and governance, four best practices consistently position organizations for success:

    1) Appoint a Launch Lead Who Bridges Strategy and Execution

    This role varies by company and launch, but the Launch Lead must flex between strategic and execution‑focused work while maintaining a strong cross‑functional lens. Launch success requires alignment across all functions—not the efforts of just one or two teams.

    2) Establish a Small, Expert Launch Management Team (LMT) to Drive Progress 

    Typically composed of the Launch Lead and a few launch‑experienced resources, the LMT drives critical work: shaping strategy, coordinating across teams, tracking progress, and flagging risks. Acting as the “quarterback” of the launch, the LMT ensures visibility, timely communication, and cross‑functional alignment.

    3) Create a Lean, Empowered Governance Structure that Can Scale

    Your model should include a Core Launch Team, Extended Launch Team, Steering Committee, and functional working teams. Core Launch Team members—one per key function—must be empowered decision‑makers who effectively communicate back to their functions. Keep the Core Team lean; leverage the Extended Launch Team to involve additional functions without slowing down execution. The Steering Committee plays a critical role by resolving escalations and making timely decisions that cannot be addressed within the Core Team, Extended Team, or individual functions.

    4) Define Roles and Ways of Working to Enable Alignment and Decision‑Making 

    Roles and responsibilities should be clearly defined across all governance groups. Equally important is aligning on ways of working early—how decisions will be made, how escalations will be handled, how information will be shared, and what each governance member is accountable for.

      Planning your next launch? 

      Building the right team and governance model is just the beginning. Whether you’re launching for the first time or bringing deep experience to a new organizational or market context, our workshop offers actionable insights, proven best practices, and practical tools to set you up for success.

      Join us on March 26th and 27th and learn from our team of launch experts. Reserve your spot today: http://bit.ly/4eP0153 or reach out to our experts here.