Most-favored-nation drug pricing is usually presented as a clever way to make other countries pay their fair share. Americans pay more for the same medicine than Germans, Canadians or the French, so why not simply link US prices to what those countries pay?
The problem is that this is not really a trade policy. It is a price control.
The only unusual feature is that Washington would outsource part of the price-setting process to governments in Berlin, Paris, or Ottawa.
The political attraction is obvious. Nobody likes paying more than someone else for the same product.
But price controls have a habit of solving the visible problem while creating a less visible one.
The price may fall on paper. The underlying scarcity does not disappear.
We have seen this with rent controls limiting housing supply.
Healthcare is no different.
The European experience is particularly instructive because these are precisely the prices the US now wants to reference.
According to the pharmaceutical industry’s W.A.I.T. Indicator published in May 2026, the median time between European approval of a medicine and actual patient access is 532 days.
Germany performs relatively well at 56 days. In Romania, the median wait is 1,201 days.
That is a difference of more than three years for the same medicine inside the same European single market.
And waiting time is only part of the story.
Roughly half of newly approved medicines are still not available to European patients. The share of medicines receiving full public reimbursement fell from 42 percent in 2019 to 28 percent in 2025. At the same time, the share available only under restrictions rose from 6 percent to 17 percent.
In other words, European systems are not simply negotiating lower prices. They are also deciding which medicines will be reimbursed, for which patients, under which conditions, and at what point in time.
That is how many of these lower prices are achieved.
The queue is not an accidental consequence of the system. It is part of the mechanism.
When a government tells a manufacturer that it will pay only a certain price, the manufacturer can delay the launch, limit availability, restrict negotiations to certain patient groups, or decide that the market is simply not attractive enough.
This matters enormously for MFN pricing.
Washington cannot simply copy the European price while pretending that the institutions that produce it do not matter. If the US imports at administratively determined prices, it also imports the incentives that accompany them.
There is already one early warning signal.
Industry data covering the past 18 months shows that a declining share of medicines approved by the FDA subsequently moves through the European Medicines Agency approval process, with a particularly sharp fall since October 2025.
It is still early data, and the pharmaceutical industry obviously has an interest in how the trend is interpreted. But the direction should not surprise anyone.
If governments reduce the expected return from launching a medicine, companies will not necessarily respond by launching everywhere faster. Some will launch later. Some will launch in fewer countries. Some development programs will simply become less attractive.
None of this means Americans should accept the current system.
US patients often do pay too much for medicines, and defending the status quo is not the same thing as defending markets.
The American pharmaceutical market has spent years building an extraordinarily complicated system of list prices, rebates, pharmacy benefit managers, insurers, and negotiated discounts. The price paid by a patient at the pharmacy counter can bear surprisingly little relationship to the net amount ultimately received by the manufacturer.
That is not a functioning consumer market.
Washington has finally started addressing this problem.
The Consolidated Appropriations Act of 2026, signed on February 3, delinked pharmacy benefit manager compensation in Medicare Part D from drug prices and rebates. PBMs will instead receive flat service fees. The law also requires a pass-through of rebates for employer health plans.
This may turn out to be one of the most consequential drug-pricing reforms in years, although some of the commercial-market provisions will not fully take effect until 2028.
Which raises an obvious question.
Why import European-style price controls before we even know whether reforms aimed at the American pricing system itself will work?
There are plenty of additional reforms available that do not require handing pricing power to foreign health ministries.
Make the real price of medicines visible to patients. A consumer should be able to understand what a drug costs, what the insurer pays, and what the intermediary keeps.
Keep FDA approval timelines competitive. The easiest route for a pharmaceutical company to make money should be to bring a new medicine to patients, not to spend years navigating regulatory or reimbursement negotiations.
And continue reforming the rebate and PBM system so that negotiated discounts actually reach the people paying for medicines.
These reforms are less politically dramatic than announcing that America will simply pay the French or German price.
But they address the actual distortions in the US market without importing another country’s rationing system.
Foreign governments can set very low prices because they are also willing to say no.
No to a medicine.
No to reimbursement.
No to certain patients.
Or simply: not yet.
American patients should understand that this is what sits behind many of the prices Washington now wants to copy.
Price controls do not eliminate the cost of medicine.
They change the way we pay for it.
Sometimes it arrives as a waiting list.