Most Favoured Nation
Added on 27/08/2026
To avoid that the price of pharmaceuticals differ too much between countries, pricing referencing is commonly used. For many years, European countries have used International Reference Pricing (IRP) or External Reference Pricing (ERP), whereby the price of a medicine is benchmarked against prices in a selected basket of reference countries. The composition of that basket and the calculation method differ by country.
Most favoured Nations (MFN) is a potential game-changer at global level and will influence country specific pricing including Belgium. To understand MFN, basic insight into the current healthcare system in the United States (US) is useful.
Besides private healthcare insurance in the US is a public healthcare system available via Centers for Medicare & Medicaid Services (CMS) and Health and Human Services (HHS).
In 2024, 92% of the U.S. population had health insurance coverage. Of those insured, 38.6% were covered through public insurance programs. Private health insurance was primarily obtained through employer-sponsored plans (81.4%), followed by direct-purchase plans (16.2%) and TRICARE (4.3%).
MFN is related to the Medicare and Medicaid programs. Both are funded by the federal government of which Medicaid has programs which can differ per State while Medicare is managed solely by the federal government and covers people aged 65+ and certain younger people with disabilities or specific conditions such as ESRD and ALS.
Drug pricing and reimbursement negotiations in the United States are highly fragmented across public and private payers, contributing to a complex pricing environment that has historically been associated with higher pharmaceutical expenditures than in many peer countries.
To keep control on the budget, the Medicare program is reformed which resulted in the ‘Inflation Reduction Act’ (IRA) in 2022. In 2025, the MFN policy is set out and on January 15, 2026 the ‘Great Healthcare Plan’ was announced with the objective to provide low-cost pharmaceuticals to American people.
Finaly 3 policies became defined: GENEROUS (Medicaid) GLOBE and GUARD (Medicare). The Medicare policies have the intention to disclose international net prices (incl. European) from specialities for which no generic or biosimilar competition is valid. These net prices can be estimated/retrieved starting from a group of reference countries. This is where MFN becomes related towards EU and Belgium.
Medicare is covering 4 parts: A (hospital care), B (drugs administered by physicians), C (private alternatives) and D (outpatient prescription related drugs).
GLOBE and GUARD concern resp. programs B and D: Based on inclusion criteria, 19 OECD are defined as reference countries, including Belgium. Pharmaceutical companies can share their net price(s) on voluntary basis, or the lowest available list price can be determined. These MFN models will start in October 2026 (GLOBE) and January 2027 (GUARD)
GENEROUS: 8 countries involved as defined by the CMS: Canada, Denmark, France, Germany, Italy, Japan, Switzerland and United Kingdom and thus excluding Belgium. In this system, the 2nd lowest net price of the specialities as listed in the Medicaid Drug Rebate Program (MDRP) will be determined based on voluntary participation of the companies.
The increasing interdependence of global pricing systems means that pricing decisions made outside the United States can no longer be evaluated in isolation. Pharmaceutical manufacturers should therefore implement integrated global pricing and access strategies that explicitly account for MFN policies, international reference pricing networks, and lifecycle-related price erosion to maintain sustainable and risk-adjusted market access across jurisdictions.
Based on consultancy experience gained over recent months across the Benelux countries, pharmaceutical companies are increasingly seeking higher prices at the time of submission than those anticipated at project initiation several months earlier. At the same time, the time required to define a final European pricing strategy is extending, resulting in delayed submissions that may ultimately affect patients’ timely access to innovative treatments.
In addition, confidential net price negotiations are likely to be impacted, as companies aim to secure a well-balanced managed entry agreement (MEA) that aligns with their revised net price policies. Consequently, higher CAPs are increasingly being proposed for volume-based contracts, while negotiating refund percentages has become more challenging, particularly given that the average refund rate under Belgian MEAs exceeds 60%.
Medicaid.gov: The Official U.S. Government Site for Medicaid and CHIP Services | Medicaid
https://edition.cnn.com/2022/08/16/politics/biden-inflation-reduction-act-signing/
Health Insurance Coverage in the United States: 2024
National Institute for Health and Disability Insurance (NIHDI). Monitoring Of Reimbursement Significant Expenses –M.O.R.S.E., 2024 data. Pharmaceutical Policy Department, Brussels, January 2026. DOI: 10.5281/zenodo.18154911.