Mixed Signals Emerge Over Impact of U.S. MFN Drug Pricing Policy on Canada
The effect of the U.S. most-favoured-nation drug pricing policy on Canadian medicine access remains contested, with industry groups citing cancelled launches and government agencies reporting steady regulatory progress.
President Donald Trump has pursued a most-favoured-nation (MFN) policy for nearly two years aimed at lowering U.S. drug prices while raising them in other countries, including Canada. As of August, 26 drug makers had signed MFN deals with the White House. The policy’s impact on Canadian patients and the pharmaceutical market, however, remains a subject of sharp debate between industry representatives and government officials.
A survey conducted by Ernst & Young LLP and commissioned by Innovative Medicines Canada found that 16 medicine launches were cancelled in Canada due to MFN among 31 different companies surveyed. Industry advocates argue the policy is driving higher drug price demands from companies operating in Canada and potentially reducing the availability of medicines for Canadian patients, particularly those requiring targeted therapies for conditions such as IgA nephropathy (IgAN).
Government data presents a different picture regarding the pace of drug approvals. Canada’s Drug Agency (CDA) is on track to review 100 drugs this calendar year, representing a 27-per-cent increase over the 79 reviews conducted in 2025. Officials point to this volume as evidence that there has been no significant slowdown in regulatory applications, attributing market delays instead to long-standing factors such as complex approval times and negotiation hurdles.
Tensions over pricing negotiations are evident in recent listing outcomes. In 2026 so far, 22 per cent of listing negotiations ended without a deal, which is twice as many no-deals as the previous year. Mauro Chies, CEO of the pan-Canadian Pharmaceutical Alliance (pCPA), stated that the 22-per-cent failure rate in negotiations is in line with recent years such as 2019 and 2022. This increased burden on public insurers during price negotiations remains a focal point for both sides.
High-profile corporate decisions illustrate the friction between patient access and pricing strategies. In July, Novartis announced that its kidney disease drug Vanrafia was approved by Health Canada, but decided weeks later not to launch it in the Canadian market. According to its website, Vanrafia has an annual U.S. list price of US$171,493. For context on treatment costs in this therapeutic area, one IgAN drug analyzed by the Institute for Clinical and Economic Review costs US$292,500 a year. Patients facing severe illness, such as Ruchi Ambike who has 19 per cent kidney function remaining, may lack access to such targeted therapies if they are withheld from the market.
Novartis did not explicitly state that MFN caused the Vanrafia non-launch. However, in a September government submission, Innovative Medicines Canada cited Vanrafia as one of three products not launching in Canada because of MFN. Conversely, successful negotiations continue to occur. In October, AbbVie announced that it had signed a deal with public insurers for the ovarian-cancer treatment Elahere, allowing it to launch in Canada soon.