![\"Trump](\"https:\/\/www.europesays.com\/canada\/wp-content\/uploads\/2026\/05\/2e9076e91f5e9adae1a43329c0dffff7.jpeg\")
U.S. President Donald Trump listens during an event about prescription drug prices in the South Court Auditorium in the Eisenhower Executive Office Building on the White House campus, Monday, May 18, 2026, in Washington. (Credit: AP Photo\/Julia Demaree Nikhinson) <\/p>\n
Last year, Donald Trump introduced \u201cmost-favoured-nation\u201d<\/a> (MFN) drug pricing for the United States. Its goal is lower drug prices for Americans and higher prices in Canada and elsewhere. That wouldn\u2019t necessarily be a bad thing.<\/p>\n Under Trump\u2019s plan, U.S. prices of brand-name medicines will be based<\/a> on prices in Canada, Denmark, France, Germany, Italy, Japan, Switzerland and the U.K. Drug manufacturers will be asked to report confidential discounted prices in these countries and the U.S. price will be set equal to the second lowest, adjusting for differences in GDP per capita. The goal is to slash prescription drug costs to Americans and raise them in other countries so as to end freeloading on American pharmaceutical innovation<\/a>.<\/p>\n Trump is also using his favourite weapon, tariffs, to pressure drug companies to reinvest in R&D in the U.S. Beginning in August, the tariff on pharmaceuticals and their ingredients imported into the U.S. will be 100 per cent. But companies that commit to reshoring will only pay 20 per cent<\/a> while their new U.S. facilities are under construction (though the rate reverts to 100 per cent in April 2030, by which time they presumably won\u2019t need to import any more). Companies that also agree to MFN pricing will pay no tariff at all during construction. So far, 17 major companies<\/a> have committed to both reshoring and MFN pricing.<\/p>\n In light of Trump\u2019s policies, drug developers are reassessing how they market medicines in Europe<\/a> and other countries, including Canada, where drug prices are much lower than in the U.S. Some companies are deciding to delay or not launch new drugs at all in some countries, preferring to lose entire markets rather than agree to low prices that, when used in the MFN price test, will severely damage their U.S. revenue. Others warn they will cut R&D in Europe unless governments increase what they are willing to pay.<\/p>\n All eight MFN reference countries judge the-value-for-money that new medicines provide. In this country, Canada\u2019s Drug Agency,<\/a> a quasi-governmental organization, evaluates new medicines for all provincial drug plans except Quebec\u2019s. Recent CDA reimbursement recommendations<\/a> have almost all been conditional on clinical criteria and\/or a price cut commonly expressed as a specific percentage reduction required to reach an arbitrary and almost certainly outdated value-for-money benchmark. In the past five years, more than half of CDA\u2019s recommended price reductions were 73 per cent or higher<\/a>. Another quasi-governmental agency<\/a> uses CDA\u2019s recommendations in its drug price negotiations with manufacturers to keep prices low.<\/p>\n Because negotiated prices remain confidential, we don\u2019t actually know how Canadian prices compare with those in the other seven MFN reference countries. On the other hand, given the steep reductions CDA usually recommends, it\u2019s reasonable to assume they\u2019re at the lower end. If so, that could force a reduction in companies\u2019 U.S. prices, which means a logical business strategy for them would be to delay bringing drugs to Canada or not launching them here at all.<\/p>\n