Negotiating MFN - Part 3: Not Every Door Is Closing

How policymakers in GENEROUS countries are really responding - and where the deals will be

This is Part 3 of Negotiating MFN, a four-part series. Part 1 examined why GENEROUS basket countries are more exposed than policymakers have assumed; Part 2 the eleven GLOBE and GUARD countries outside the basket. This piece is a short read. The accompanying paper, Finding the Edge Cases, goes deeper - and is where the evidence lives.

A market access leader I spoke to recently had just modelled two late-stage assets across the GENEROUS basket countries. The conclusion: launch in her market - a market her company had always treated as a priority - might no longer make commercial sense. She was preparing for a scenario in which nothing launches there until at least 2029. 

The arithmetic behind that is stark. Under GENEROUS, the second-lowest net price across eight comparator countries sets the reference for US Medicaid - and the 17 companies that have signed MFN deals have extended that commitment, for future launches, to Medicare and US commercial sales too. A single low ex-US price can now cost more in the US than the launching market is worth. Sometimes many times more. 

So some doors are closing. But not all of them - because what happens next depends on how policymakers in the eight countries respond. And that contest is only beginning. 

Four camps

In every basket country, four positions are competing for influence. 

The Theocrats defend the architecture. If a medicine cannot launch at a price the system finds acceptable, that is the system working as intended - even where patients go without. 

The Accommodators are prepared to pay more – to an extent. They are scarce however. And where they have moved, the motive so far has been investment, not access. 

The Visionaries want to change the game entirely: alliances of the ‘Middle Countries’ jointly procuring medicines. Expect more such noise; do not build a launch plan on it. 

The Pragmatists - ultimately the most important - have concluded that routinely missing out on new medicines is neither clinically nor politically survivable. They are not about to abandon pricing discipline. They are looking for ways around it, case by case.

No country is a camp

It is tempting to sort the eight countries into these boxes. Resist the temptation. In every country the camps are in contention, and what a company can achieve depends on who is ascendant in that market, at that moment - a balance that shifts with political winds. Germany looks solidly Theocrat, yet it has already softened where disinvestment loomed. The UK moved fast to Accommodate - for investment reasons – but has not given up control. Switzerland and Sweden are quietly assembling Pragmatist tools. 

Where the deals will be

Pragmatists, we believe, will come to dominate in most GENEROUS countries, because only they hold a position that is both politically compelling and sustainable. And pragmatists deal in what we call edge cases: specific products, with strong evidence and political salience, where a bespoke bilateral arrangement may unlock access that suits the interests of all parties – when the standard pathway cannot. 

Then there is the variable almost everyone underweights: investment. Governments are markedly more willing to make concessions that secure investment or prevent disinvestment. Expect side deals of every kind - including some that combine access terms with investment undertakings. The template exists; governments are already signalling appetite.

The catch

Most asset-market combinations will not support an edge case. Some will - and for those, the value can run to hundreds of millions of dollars in preserved access, at no cost to US pricing integrity. Finding them takes analysis most companies have not yet done. Negotiating them takes capabilities most access organisations were never built to hold: these deals cut across pricing, politics and investment - and across health, finance and industry ministries. 

The accompanying paper, Finding the Edge Cases, sets out the full framework: the country-by-country evidence, the four conditions that make an edge case viable, how to map your portfolio against them, and the capability required to convert them.

Not every door is closing. Some are waiting for the right knock. 

In Part 4: the multiplayer strategic game MFN has created for global launch strategy - and the commercial opportunity most companies have not yet identified.