Documents Reveal U.S. Deals to Share Drug Revenue from Canada and Other Nations
Newly disclosed agreements between the Trump administration and major pharmaceutical companies Pfizer and Eli Lilly indicate plans to share increased revenue from drug sales in eight specified countries, including Canada, with the U.S. government.
Newly disclosed documents obtained by Public Citizen Inc. reveal that U.S. pharmaceutical companies Pfizer and Eli Lilly have signed agreements with the Department of Health and Human Services (HHS) to share a portion of increased revenue from drug sales in specified countries, including Canada. These deals are part of a most-favoured-nation pricing policy aimed at offsetting lower U.S. prices by increasing international prices.
The agreements, dated February 23, list Canada among eight target nations. The Eli Lilly agreement defines these "specified countries" as Canada, Denmark, France, Germany, Italy, Japan, Switzerland, and the United Kingdom. While heavily redacted, the documents include provisions for returning increased revenues to American patients and taxpayers. Specifically, the Pfizer agreement states that beginning January 1, Pfizer agrees to share a redacted portion of net increased revenue from ex-U.S. sales with HHS.
U.S. President Donald Trump has pursued this most-favoured-nation drug-pricing policy with over a dozen major pharmaceutical companies since entering office last year. Doug Clark, former executive director of Canada’s Patented Medicine Prices Review Board (PMPRB), noted that the Lilly agreement defines the "MFN price" as the second-lowest international price. This definition places pressure on countries setting the floor for international drug prices.
White House spokesperson Kush Desai responded to inquiries by quoting past news releases stating that drug companies would "repatriate increased foreign revenue," but did not specifically confirm that the U.S. government would receive funds directly. Neither Pfizer nor Eli Lilly answered questions about whether they had increased Canadian prices in response to these deals.
Contextual data highlights the disparity in drug costs: Canada’s PMPRB reported that the average U.S. list price of a drug was more than three times that of the Canadian price. Canada currently holds the fifth-highest prices among developed nations. In response to domestic concerns, the Canadian federal government struck a pharmaceutical task force this spring, which issued a report with 39 recommendations in July. The Canadian government is expected to act on these recommendations by the end of the year.