The drug pricing conversation has shifted. While many are still focused on the Inflation Reduction Act (IRA), a series of executive led “Most Favored Nation” (MFN) models GENEROUS, GLOBE, and GUARD have redefined U.S. market access.
The catalyst for this shift is a direct “America First” policy spearheaded by President Donald Trump. The administration’s core goal is to end what it calls “global freeloading”: The dynamic where American patients allegedly pay the highest prices in the world, effectively subsidising the R&D and lower drug costs enjoyed by other developed nations. By sending formal “demand letters” to the CEOs of the top 17 pharmaceutical companies and threatening massive import tariffs, the White House has successfully forced “voluntary” agreements from 16 of the 17 industry giants including Pfizer, AstraZeneca, Eli Lilly, and Novo Nordisk. While each agreement has nuances, most “MFN Deals” signed at the White House share three core pillars: An international basket, net price coupling and enforcement through incentives.
If you are just catching up with the late-2025 regulatory flurry, here is what you need to know about the new international reference pricing (IRP) architecture. How the new models impact the life of patients is yet to be seen.
1. The GENEROUS Model - Impacting Medicaid patients
Launched January 1, 2026, this voluntary model allows states to seek supplemental rebates to align Medicaid prices with the second-lowest GDP-adjusted price in an 8-country basket.
- The Reference Countries: Canada, Denmark, France, Germany, Italy, Japan, Switzerland, and the United Kingdom.
2. The GLOBE Model – Addressing high-cost medicines for patients in Medicare Part B
A mandatory model slated for October 1, 2026. It targets high-cost, physician-administered drugs in 25% of the U.S.
- The Reference Basket: This model utilises a broader 19-country OECD basket.
- Large Basket of Reference Countries: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Italy, Japan, Luxembourg, Netherlands, New Zealand, Norway, Portugal, Sweden, Switzerland, and the United Kingdom.
3. The GUARD Model – Targeting retail pharmacy drugs in Medicare Part D
Also mandatory, launching January 1, 2027. It targets retail pharmacy drugs, using the same 19-country basket as GLOBE to set an international inflation benchmark.
The Strategic "Echo Effect"
The era of siloed, national pricing is over. A price concession in Berlin and any other reference country in Europe now has an automated “echo” in Washington D.C. Key stakeholders are no longer resisting the tide; instead, they are redefining and reassessing the commercial case for the value of innovation.
- Stefan Oelrich (President of EFPIA/Bayer): “Rather than viewing MFN as external pressure, we should see it as an opportunity to reshape our shared approach to valuing innovation. It should not be a national cost, but a global investment.”
- Chris Boerner (CEO of BMS): “Most research takes place in the US and is financed by Americans… Other countries must also be prepared to spend a larger portion of their healthcare budgets on innovative drugs.”
- Dave Ricks (CEO of Eli Lilly): “Long term, we should rebalance pricing between the US and Europe… It’s a rational thing. In my career, it’s gotten more and more out of whack.”
- Thomas Schinecker (CEO of Roche): Notes that these “U.S. deals” are already forcing higher launch prices in Switzerland to prevent dragging down U.S. revenue.
Implications to keep in mind
- Strategic Pricing Options: Companies must strike a balance between expectations and implications to find the optimal point between raising ex-U.S. prices or accepting lower U.S. revenue. Given that the U.S. remains the largest market and primary source of revenue, the priority will likely shift towards preventing price erosion due to the pricing influence of MFN-linked markets, even if it requires substantial adjustments, including higher prices in Europe or Japan.
- The Role of Confidential Rebates: As MFN calculations appear to rely heavily on public list prices, confidential rebates might gain immense relevance. However, it remains unclear how much transparency CMS will gain into global net prices. This necessitates vigilant monitoring of future disclosure requirements and actively seeking opportunities to influence price discussions.
- Increasing Importance of Innovative Contracting: To sustain higher list prices globally, manufacturers must embrace opportunities for Outcome-Based Models, Pay-for-Performance, and Volume-Based Agreements. These mechanisms might allow manufacturers to reconcile payer budget constraints with the need to maintain global price corridors.
- Impact on Launch Sequencing: The ‘automated echo’ of MFN pricing may create strong incentives to delay product launches or avoid certain markets altogether, as a low price in one territory could trigger a catastrophic price reset in the U.S. This is an issue manufacturers should carefully reconsider to maximise overall revenue and commercial success.
What should you do now?
- Map your Exposure: Analyse the impact of the available information and the net prices across all 19 GENEROUS / GLOBE / GUARD countries.
- Comprehensive Pricing and Launch Strategy Development: Actively assess potential implications and identify opportunities and threats early, driven by global and European pricing and launch strategies.
- Engage in Rulemaking: The comment window for GLOBE/GUARD technicalities remains open until February 23, 2026.
At Kintiga, we specialise in interpreting these intersecting domestic and international signals. Don’t let the complexity of 2026 compromise your 2027 lifecycle strategy.
Sources:
- Lilly CEO David Ricks hits back against MFN drug pricing reform
- Bristol CEO Boerner says other countries should ‘pay more’ for US pharma innovation (BMY:NYSE) | Se…
- EFPIA_Day2025_ENG_EFPIA_President.pdf
- Trump’s drug-pricing deals won’t benefit most Americans today. They could over time. – POLITICO
- AbbVie inks MFN drug pricing deal, pledges $100bn to US R&D
- Fact Sheet: President Donald J. Trump Announces Largest Developments to Date in Bringing Most-Favor…
- Most-Favored-Nation Prescription Drug Pricing Executive Order: Legal Issues | Congress.gov | Librar…
- CY 2026 Physician Fee Schedule Final Rule Update: Preliminary ASP Reasonable Assumption and BFSF Ce…
- Roche-Chef nach Trump-Deal: Medikamentenpreise werden steigen
- generous-rfa.pdf
- Federal Register :: Global Benchmark for Efficient Drug Pricing (GLOBE) Model
- Federal Register :: Guarding U.S. Medicare Against Rising Drug Costs (GUARD) Model
- CMS Proposes New Mandatory GLOBE Model | CMS
- GUARD (Guarding U.S. Medicare Against Rising Drug Costs) Model | CMS
- MFN Drug Pricing Update: After GENEROUS, GUARD and GLOBE Issue From CMS’s Innovation Center – Part …
- MFN Drug Pricing Update: After GENEROUS, GUARD AND GLOBE Issue From CMS’s Innovation Center – Part I
- U.S. Drug Pricing Year in Review: Reflections on 2025 and Getting Ready for 2026 | Insights | Sidle…
