Trump's 'Most Favoured Nation' Drug Pricing Policy Raises Concerns for Canadian Medicine Access
U.S. President Donald Trump announced a new drug pricing policy on September 18, aiming to match the lowest prices paid by other developed nations. While intended to lower U.S. costs, agreements with 26 pharmaceutical companies have sparked warnings from Canadian experts and industry groups about potential price hikes, reduced discounts, and delayed access to medicines in Canada.
On September 18, U.S. President Donald Trump announced a "most favoured nation" (MFN) drug pricing policy designed to lower prescription drug costs in the United States. The administration stated that all state Medicaid programs would benefit from these changes, which aim to align U.S. prices with the lowest rates paid by other developed nations.
The Trump administration has signed agreements with 26 large pharmaceutical companies, including Pfizer and Eli Lilly. These deals are structured to keep U.S. drug prices comparable to those in 19 reference countries, which include Canada, Europe, Australia, Japan, and South Korea.
However, the policy has drawn sharp criticism and concern from Canadian health experts and industry representatives. Innovative Medicines Canada warned that the U.S. MFN pricing threatens to disrupt access to existing medicines, delay the introduction of new drugs, and undermine confidence in Canada’s pharmaceutical market. The organization highlighted risks such as higher drug prices in Canada, reduced discounts offered by manufacturers, and patients potentially sacrificing necessary medicines due to cost.
Dr. Thomas Hwang and colleagues published a modelling study in The Lancet supporting these concerns. The study noted that MFN pricing could have unintended effects on prices and access to medicines in the referenced countries, as manufacturers seek to offset lost revenue in the U.S. market.
Public Citizen, an advocacy group, posted copies of the agreements between the U.S. government and Pfizer and Eli Lilly after suing to obtain them. The documents reveal terms that may facilitate charging more for drugs abroad or discontinuing supply in other countries. Specifically, redacted agreements show carveouts for certain medications, such as Eli Lilly’s weight-loss drug Zepbound, meaning GLP-1 medications are not subject to most-favoured nation pricing.
Additionally, one deal suggests that Pfizer agreed to share revenue with the U.S. government if it raises drug prices outside the United States. Mina Tadrous, a researcher at St. Michael's Hospital and the University of Toronto, along with Nav Persaud, also expressed concerns regarding the broader implications of these pricing structures on international markets.