Should US Biotechs Delay Their European Launch Because of MFN?
Why actual exposure to international reference pricing is often smaller than many companies fear
Following the US most-favoured-nation (MFN) pricing initiatives, pharmaceutical companies have reconsidered their international launch strategies. Reuters reported in March 2026, citing GlobalData, that new drug launches in EU markets fell by about 35% in the ten months after the executive order, compared with the ten months before. GlobalData noted that a direct causal link remains unproven.
The concern is straightforward: could launching in Europe at a lower price jeopardise revenue in the much larger US market?
I suggest we check first whether your product faces a material MFN pricing obligation at all. For many biotechs, the answer may be no.
1. GLOBE: narrower than first proposed
The final GLOBE model brings international reference pricing into Medicare Part B through an incremental manufacturer rebate, amending the existing Part B inflation rebate.
To be included, a product must meet several conditions:
- It is a single-source drug or biologic paid under Original Medicare Part B.
- It falls within one of seven therapeutic categories, including antineoplastics.
- It exceeds $100 million in Original Medicare Part B spending over a 12-month period.
- It is not subject to an exclusion or waiver.
Exclusions include orphan-only drugs, cell and gene therapies, plasma-derived products, drugs with an IRA negotiated price, and originators once a biosimilar is on the market.
Manufacturers that signed a GENEROUS Medicaid agreement by 17 August 2026 are waived from GLOBE for the drugs that agreement covers. Whether agreements signed later qualify depends on the final rule’s terms, which a biotech should verify before relying on this route.
GLOBE also applies only in selected geographic areas covering about 25% of Original Medicare Part B beneficiaries, and many newly launched products stay below the $100 million threshold in their early commercial years. The model’s performance period begins on 1 April 2027, and PhRMA has filed suit to challenge it.
2. GUARD and manufacturer agreements
GUARD would extend international benchmarking to selected Medicare Part D medicines. As of late 2026 it remains a proposed model, and its final scope is uncertain.
Many large manufacturers have signed MFN agreements with the administration. These apply to those companies and do not automatically bind every medicine sold in the US. A European price does not automatically become a US price. A biotech that licenses a product to, or is acquired by, a company with an MFN agreement should check what that agreement requires.
3. The 19-country reference basket
GLOBE uses 19 economically comparable countries, including major EU markets, the UK, Switzerland, Canada, Japan, Australia and South Korea. GUARD proposes the same basket.
Delaying Europe alone does not remove international reference-price exposure. Avoiding it would mean staying out of all 19 markets, a much more consequential decision for a biotech than postponing Europe.
4. The cost of waiting
Consider a hypothetical US therapy that could earn $50 million a year in Europe. Waiting two years means giving up about $100 million in European sales, plus any ground lost to competitors that launch first.
Orphan-only drugs and FDA-approved cell and gene therapies are excluded from GLOBE. For these products, and for those below the spending threshold or outside the seven categories, delaying Europe offers little protection against GLOBE, while the opportunity cost is substantial.
Commercial payers can also use government price benchmarks in negotiations. That risk exists whether or not a product is in GLOBE, and delaying Europe does not remove it.
A more informed launch decision
Before postponing an EMA submission or a European launch, biotechs should evaluate:
- Regulatory scope: is the product within GLOBE’s scope, or potentially subject to GUARD?
- Pricing exposure: which reference countries matter, and what benchmark could they establish?
- Commercial value: what European revenue, patient access and competitive position would be given up?
- US strategy: what is the expected effect on net revenue, rebates and payer contracting?
For some assets, delaying Europe remains justified. For others, it means giving up substantial revenue to avoid a US pricing risk that is limited, conditional or not yet in force.
Before postponing a launch, a company should be able to name the specific US mechanism it is protecting against and put a number on it.
What factors are driving your cross-border launch decisions?