Trump’s MFN Model Threatens Up to 60 Percent of Big Pharma Profits in the US

The Most-Favored Nation (MFN) drug pricing order introduced by the US administration could slash Big Pharma’s profits in the American market by 50–60 percent, according to industry analysts. The executive order aims to bring US drug prices in line with those of other developed nations, potentially reducing costs for prescription drugs by up to 90 percent.

Analyst Vishal Manchanda from Systematix Group highlighted that companies like Pfizer, Bristol Myers Squibb, Roche, and Abbott could face significant financial losses if the proposal is implemented in its current form. However, the order is expected to undergo revisions, diluting its potential impact on the pharmaceutical giants.

Under this policy, the Secretary of Health and Human Services will establish mechanisms allowing patients to purchase drugs directly from manufacturers at MFN pricing, bypassing intermediaries. President Trump emphasized that this initiative ensures equitable drug pricing based on the lowest prices charged in other developed nations.

The US drug market, valued at around $660 billion, contributes nearly 50 percent of global pharmaceutical revenues. Leading companies such as Pfizer and Johnson & Johnson derive the majority of their earnings from the US, with some firms relying on the market for up to 70 percent of their total revenue.

While this order primarily targets patented drugs, Indian generic drugmakers are expected to remain largely unaffected due to their focus on low-margin generics. Nishith Sanghvi of India Ratings explained that profits in the generics segment are already slim, averaging around 15–20 percent, leaving little room for further reductions.

If enforced, the MFN model could reshape the US pharmaceutical landscape, forcing global companies to reevaluate their pricing strategies and profit expectations.