When Drug Pricing Collides With Politics

Two events dominated the global drug pricing environment in November. In the United States, the midterm election results were not unexpected but nevertheless shocking. The “blue tsunami” fundamentally changes the balance of power in congress and likely puts an end to republican led legislative initiatives. Meanwhile, pricing and affordability of prescription drugs in lower- and middle-income countries were in the spotlight through a WHO organized “Fair Pricing Forum”.

How Will the Election Impact MFN?

While democrats hate the prescription drug industry as much as the republicans do, it may be unlikely that President Trump’s most favored nation (MFN) pricing initiatives will pass in congress any time soon. Democrats are unlikely to support anything that Trump has proposed and will have their hands full in driving their own priorities, trying to reverse some of the decisions of the past two years. Given President Trump’s veto powers, congress may in many respects be a lame duck until the next presidential elections.

An element of Trump’s MFN strategy is supposedly to raise European drug prices. While success in achieving this objective was questionable from the beginning, it may even be less likely in a post-election world where Trump’s negotiating position is further weakened. The last months have shown the economic challenges in France and other European countries due to unreformed and no longer affordable entitlements of aging populations and the cost of heightened defense requirements. Increasing budgets for prescription drugs is a pipe dream.

The 2026 Fair Pricing Forum

In early November, the WHO kicked off its “Fair Pricing Forum”, a periodic global meeting with attendance of government officials, academics, non-governmental organizations (NGOs) such as Medicines Sans Frontiers, some industry representatives and pricing experts. The objective of the meeting is to find solutions to improve access to prescription drugs in lower- and middle-income countries. Below are the main topics of interest.

Differential Pricing

Differential pricing or equity pricing is the principle that lower income countries should be allowed to pay less for prescription drugs makes economic and humanitarian sense. However, drug companies have been hesitant to support a formalized arrangement, as high income countries tend to opportunistically reference lower prices to get a better deal. The risk is also that, similar to the government mandated depressed prices in Europe, it will be used by US politicians to demand lower US prices. The introduction of differential pricing to benefit lower and middle-income countries requires discipline in higher income countries not to abuse the arrangements.

Compulsory Licensing

Threats of compulsory licensing, allowing local governments to authorize generic production of patented drugs under emergency conditions, have been extensively used to negotiate lower prices and /or authorized local manufacturing of high-cost innovative drugs.¹ After initially involving mainly HIV/AIDS drugs, this is now affecting many other categories, including anti-cancer drugs.

Price Transparency

Many countries want complete transparency in what prices every country pays for drugs. While reasonable on the surface, it inhibits the ability of drug companies to avoid price referencing by higher income countries. Under full price transparency, price referencing and opportunistic trade make differential pricing impossible to sustain. Solidarity tends to stop at the border.

Cost Transparency

A continuing debate is the push for required disclosure of drug manufacturer cost of development and manufacturing of prescription drugs. The WHO agreed to a watered-down resolution regarding transparency of drug cost that did not contain disclosure requirement of manufacturing cost in 2019.² Since then, some academics, NGOs and lower-income countries have continued to push for manufacturing cost disclosure requirements. Given the low probability of success in drug development, it feels that calculating the cost of drug manufacturing is like calculating the cost of a winning lottery ticket. I will happily buy anybody’s winning lottery ticket at a handsome premium over the acquisition cost.

In my next column I will report more on the discussions and any progress from the Fair Pricing meeting, which at the time of writing of this column was still in progress.

Ed Schoonveld is a Value & Access advisor for Schoonveld Advisory, LLC and author of The Price of Global Health. He can be reached at Ed@SchoonveldAdvisory.com.

References

1. Intellectual property: Overview of the TRIPS Agreement. World Trade Organization. Accessed November 9, 2026. https://www.wto.org/english/tratop_e/trips_e/intel2_e.htm
2. Miles T. WHO agrees watered-down resolution on transparency in drug costs. Reuters. May 28, 2019. Accessed November 9, 2026. https://www.reuters.com/article/business/who-agrees-watered-down-resolution-on-transparency-in-drug-costs-idUSKCN1SY0XF/