[00:00:08] Narrator Welcome to the second series of The Growth Blueprint, a podcast from Simon-Kucher, a global consulting firm with 40 years of experience in helping companies unlock smarter, more sustainable growth. As the world's leading pricing and growth specialist, we work with clients to increase both revenue and profits, helping them turn commercial strategy into measurable results. Throughout this series, we will look at the key trends shaping the future of business. We will cover all major sectors, giving you a panoramic view of what's happening in the market and what you can do to stay ahead.

In today's episode, Senior Partners Christian Schuler and Rob Dumitrescu speak about how 2026 is reshaping the global pharma and biotech landscape. Together, they discuss the introduction of most favored nation pricing in the US, the rollout of Europe's joint clinical assessment, and the rise of equitable access strategies in low and middle income countries. They explore how these shifts are changing global launch sequencing, pricing strategies, and business development decisions, and what pharma leaders can do to protect value while maintaining patient access.

[00:01:12] Christian Schuler Hello everybody, my name is Christian Schuler. I'm Senior Partner and Head of the health sector at Simon-Kucher and based in Munich. Today we want to discuss most important trends for 2026 and beyond, what every pharma, leader, and manager should have on their radar and on their mind. And I'm thrilled to have this conversation with my colleague Rob Dumitrescu.

[00:01:30] Robert Dumitrescu Yeah, hi everybody, Rob Dumitrescu, Senior Partner Simon-Kucher based out of our office in New York. I lead our pharma and biotech practice. I serve on the company's board also. Let's dive straight into it and what a year it's been. And of course, I'm talking about the most favored nation pricing, MFN. We've been both of us doing this for a long time. And have you ever seen something bigger than MFN hitting the pharma and the biotech industry in terms of pricing? If we really start from the beginning and boil it all down, what exactly is MFN and why is it such a game changer for everyone?

[00:02:05] Christian Schuler MFN stands for most favored nation and essentially means linking US drug prices to lower prices in other developed markets. So for the first time, the introduction of international reference pricing in the US. And that is huge because the US prices for innovative drugs are often three to four times higher than in other OECD countries. And if MFN really now becomes reality, it could significantly reduce revenues of the overall industry, impact its profitability, and ultimately also limit RD investments, which could lead to significantly less new and innovative products or drugs being launched.

[00:02:44] Robert Dumitrescu Christian, absolutely major shift for the pharma industry. We never before had international reference pricing into the US. What happened next? What happened after the order was signed?

[00:02:56] Christian Schuler The story did not end here, right? And on July 31, 2025, seventeen major pharmaceutical companies received letters from that administration outlining a 60-day timeline to take action. And the demands in those letters included extending MFN pricing to Medicaid, guaranteeing MFN pricing for all new launched products of those companies, creating a direct-to-consumer channel in which also products should be available to consumers at MFN price levels, increasing ex-US revenues and repatriating their funds, and expanding US manufacturing. And quite importantly, also when it comes to this manufacturing, the pharmaceutical research and manufacturers of America Associations, the members responded with promising over five hundred billion in US investments over the next decade. So you can really see the pressure on the industry is already enormous, and a lot of major pharma companies really promise to invest a lot more in the US moving forward.

[00:04:02] Robert Dumitrescu So Christian, it was already a lot to that point, but then even more news coming out recently, a few weeks ago, earlier this month, right?

[00:04:09] Christian Schuler Yeah, and on November 6, 2025, CMS introduced the new Generous model. Generous stands for Generating Cost Reductions for US Medicaid. And this model adds another complexity layer to MFN by linking Medicaid outpatient drug prices to the second lowest manufacturer reported net price across eight referencing countries. It's a major step toward deeper price referencing in the US. It's a big development, as we already said.

[00:04:39] Robert Dumitrescu Yeah, I mean, still many things we don't know. What we know for sure is that MFN focuses so far on in-market products, despite some companies making commitments also for new launches. But so far we're looking at in-market products. Primarily we're looking at Medicaid, we're looking at some of these DTC channels that are emerging now. What we don't know is whether MFN is going to be spilling over into other channels, into Medicare, into commercial. If more announcements are going to be made in that space, for now it's a gap in the policy. And we don't know for sure how it's going to impact new product launches, right? Besides the commitments that some manufacturers have made, pledging that they're going to align the XUS prices with US benchmarks, that part is still a little bit fuzzy. And I think this is still a major space of uncertainty for pricing strategies. And it's coming up in every single pricing project, all of the launch pricing work that we do right now, everybody's asking the question what do we do about our pricing ex-US?

[00:05:36] Christian Schuler Wow. Yeah, quite amazing. So again, so that is the US picture, right? But of course, we also need to better understand what it means for ex-US markets and especially for innovative drug launches. I mean, again, everybody knows that the US is the dominant global sales driver for innovative drugs. About 67% of the global sales come from the US. This imbalance, which is, as I said at the beginning, primarily driven by price differences, could really lead to some drastic changes and how products are launched moving forward in the pharmaceutical market, right? And in extreme cases, of course, it could also lead to even to no launches outside the US for certain drugs to avoid really harming the US price. So again, the ripple effects for the industry we work in could really be huge.

[00:06:27] Robert Dumitrescu You’re absolutely right. I think the risk here, Christian, to have delays, to have restrictions on access only for the most severe patients, the ones where pricing can be more equivalent to US level prices. There's a real risk here for patients and for access outside of the US. Any ideas? How are we going to get out of this impasse?

[00:06:48] Christian Schuler It feels like a conundrum, right? It can only really be solved on a political level, in my view. Wealthy countries need to ideally pay more for innovative drugs moving forward. And ex-US HTA process, so the health technology assessment processes really need to be adapted accordingly. We often see that for breakthrough therapies with major clinical benefits, almost similar prices between the US and Europe are possible. But for drugs where we only see a minor or minimal added benefit, which are launched outside the US, we may see delays, or even worse case, no launch, because again, higher prices cannot be implemented outside the US.

[00:07:34] Robert Dumitrescu Still so much uncertainty both in the US in terms of how this now plays out, but also the implications for the ex-US markets. What do you think Christian pharma companies should be doing now? I mean, what are you recommending to them, especially outside the US?

[00:07:48] Christian Schuler We have seen MFN is no longer just a concept, right? It has become reality and it will reshape not only how pricing strategies and global negotiations will go, it potentially has the power to really change the landscape of the overall industry, right? Pharma leaders really need to prepare for this new dawn landscape. Short term, in our view, scenario planning is critical. Companies need to model the financial impact of MFN on their portfolio and future launches. Secondly, they potentially also need to rethink global pricing strategies because what happens now in Europe, Japan, and Canada will now directly influence the US prices and US revenues. So that is the short term.

Long term, in my view, three, four things will be important. And companies will need to focus more on high value drugs with strong phase three clinical data with meaningful improvements and patient relevant outcomes that really justify premium prices around the world, globally in the US as well as elsewhere. They potentially, especially when you're thinking about ex-US markets, need to optimize label strategies. So carve out certain patient subpopulations or use the labor restrictions to manage the budget, impact and secure higher prices. Ex-US markets, they potentially also need to rethink global licensing strategies for already marketed products, but potentially also for newly launched products. And last but not least, yeah, think about innovative contracting, right? Think about outcomes based agreements, pay for performance models, or even alternative funding pathways, private insurance pathways or self pay pathways, even in US markets. So again, a lot of new developments that companies need to think about, specifically in the long term. But again, we both know, right? Companies that adapt quickly will be better positioned than others in this new environment.

[00:09:54] Robert Dumitrescu Some great words of advice there, Christian. But there are also other topics out there. So enough on MFN for now. Let's talk about European Joint Clinical Assessment, EU JCA. So this is another major topic, I think top of mind for pharma managers in Europe outside the US. And this regulation, it went into effect now. It's been years that it's coming, but it finally now went into effect and it's concrete and it's happening. Earlier this year, January 12th, 2025, it started for oncology medicines and ATMPs, advanced therapy, medicinal products, and the schedule, it's planned that this also moves on and covers orphan drugs starting in 2028 and eventually every medicine that's authorized in Europe by 2030. So we already started years ago to build a center of excellence on this topic. What can you tell us about first experiences here, Christian?

[00:10:46] Christian Schuler Yeah, right. I mean, with EU JCA, Europe is also entering a new era when it comes to health technology assessment. And in our view, it's really going to reshape how pharma companies think about evidence, pricing, and market access. So the EU JCA aims to increase HTA coordination and to realize synergies in the clinical data assessment process. So instead of having 30 individual country-specific dossiers, there's only the requirement for one single main clinical dossier. So availability of the EU JCA report, ideally within 30 days after regulatory approval, means that EU payers will now be able to initiate the local PMA processes much faster and without conducting local dossier assessment. So basically this new framework for evaluating clinical evidence at the European level instead of every country doing it separately means really that we have much, much more harmonization. But Rob, does it mean that it has an impact on pricing and reimbursement decision for new drugs then?

[00:11:56] Robert Dumitrescu No, and that was never the plan, right? And I think that was not the origin story of EU JCA. So it's not about setting prices, it's not about determining reimbursement at the local level. I think that is still within the remit of member states. So on a national level, they take their own decisions, but it will harmonize how the clinical benefit and especially the comparative effectiveness against other therapeutics, how those are judged and make that consistent across Europe. So think of it as the EU kind of saying, let's agree centrally once and for all, how does the clinical evidence of this product stack up? And then downstream of that, you let the countries decide what it actually means for value and for pricing and for reimbursement.

[00:12:38] Christian Schuler Very interesting. But again, between us two, don't you think that there's an indirect impact on pricing and market access? So instead of tailoring the evidence and dossier for each country, companies now need to build one unified story that can stand up across all of Europe. So quite frankly, again, also mentally quite a big shift from how to convince Germany or Germany payers to how do I convince Europe as a whole?

[00:13:05] Robert Dumitrescu I mean, I think you're right, right? That's the possible downstream effect of this is that in the end, all the members see the same evidence package and present it in the same way and with the same storyline coming out of the report. So if it's positive, right, that's great. But if it's weak and that gets called out in the report, the weakness is then going to be visible to everybody. So it's almost making an issue, potentially making an issue out of something that a country might not even have seen themselves, right? Which isn't maybe not even applicable to them given their epidemiology or given the therapeutic alternatives available in the market or the reimbursement conditions of other therapies in the market. And that follows you then, right? The weakness from the central report can follow you into every negotiation. And the payers can raise that in every country by country as they go.

[00:13:47] Christian Schuler Yeah. So again, prices are still decided locally, as you said, but the clinical foundation is now shared. And of course, also this will create pressure for consistency in pricing across Europe. And we might see compressed price corridors. Pharma company might lose pricing flexibility, but there's also some upsides, right? We will potentially gain speed to market and transparency. So what should pharma companies and biotech companies actually do about this?

[00:14:17] Robert Dumitrescu So you've got to design trials, evidence plan. You've got to be thinking about EU JCA right from the start. And you need to think about the PICO predictions early. You all know by now, I think the JCA report, it's structured by this PICO framework with population intervention comparator outcomes. That's to ensure kind of consistency and make the consolidation valuable for all the EU member states. But the PICO prediction is really critical to inform what sort of evidence you're planning and to make sure that you're actually aligning to the pricing and market access and reimbursement objectives. And the other thing is I think you need to engage with the regulators and with the HTA bodies early on. The scoping phase, which is when the PICOs are defined, it's going to make or break the assessment. And in all of this, I think there's got to be a cross-functional coordination. It's absolutely critical that you put regulatory together with clinical, with medical teams, with market access teams. You all need to be working towards the same goal here.

[00:15:18] Christian Schuler Wow, so a lot to do for companies. Ideally, companies should build an internal EU JCA readiness, right? New timelines, new workflows, and a single evidence narrative that fits both the EMA and the EU JCA expectations. The joint clinical assessment is more than a process, it's really a mindset shift that we see, and it really pushes companies to think bigger, act earlier, and prove value on a European scale. A key question are companies well prepared for this new process? Well, we have a center of excellence for EU JCA, and they did an industry study in late 2024 with some industry leaders. And there we learned only one-third of the companies feels that they're well prepared for EU JCA. Key drivers for this one-third of companies who was prepared well is the size. Of course, the bigger the company, the more people they have to work on this, and also whether their near-term pipeline product really included a drug in scope of the first wave of the EU JCA. So that means that roughly two-thirds of the companies are not well prepared for this yet. At least that is what they say. And they use rather a watch and wait approach and plan to learn from experience of others. Stay tuned for more news on EU JCA.

Next topic equitable access strategies in low and middle income countries or short, LMICs. Rob, we also have a Center for Excellence for equitable access and LMICs. Some colleagues recently published a fantastic industry study on equitable access in LMICs. It's a hot topic, but also a very much needed topic. So what are some of the key findings and key things that the team has presented and that we should take away from that?

[00:17:12] Robert Dumitrescu Oh, you're right, Christian. We've been doing a lot of work on that topic. And you're right. There was this industry study very recently. I recommend everybody go and look that up. We spoke with 25 senior industry leaders who are operating in the space of equitable access. There were some clear messages coming out of that, which I think are really relevant for many companies, if not all companies, particularly there are still many companies that I think look at this in a very old-fashioned way and still just only take their baby steps when it comes to equitable access, where they still have a lot of doubts about whether they should be and how they should be investing in this area. And maybe four key points coming out of the industry study. First and I think foremost is LMICs are now part of core strategy. This is not just a sideshow. LMICs are home to 80% of the world's population. And it's no longer just about getting them access to therapies for communicable diseases. I think now it's a critical commercial imperative. And also for innovative therapies for specialty medicines. You see that also in analyst calls. Investors are asking and they're pushing companies to show what are you doing in LMICs? Are you finding ways for that to contribute to the commercials as well? Second point is that the strongest companies, they're really thinking about LMICs already during clinical development phase. So they're bringing LMICs even into phase two and phase three decisions about which products advance, about the trial footprint, which geographies, about the registration pathways. They're thinking about what sort of targeted tech transfer agreements they can put in place to accelerate availability in the LMICs. The third point that I want to highlight is you've got to look beyond the traditional indicators in figuring out how you assess and how you prioritize LMIC launches. So it's not just about the GDP of those markets. I think, you know, companies are choosing which markets they go into on the basis of an evaluation around system readiness, the trajectory of policies, the willingness of ministries and payers to engage, level of inequality and unmet need in the population. So it's not just about the GDP level and even GDP being replaced by more meaningful indicators like looking at household spending or looking at insurance coverage. And then the fourth point, and it's a really important one, is this idea that you've got to meet the markets, the LMICs where they are. So you've got to design for the ecosystem in these markets. And that means it's not just about bringing a product into the market. You've got to pair the product with diagnostics, investments into HCP capacity, training HCPs, referral pathways. You've got to think about data and tools to kind of overcome some of the system gaps that you have in place. So these are adjacencies to the product, right? And these are areas where I think a pharma company, for the most part, in the past might have said, that's not really our business. But there are really tangible examples.

[00:20:08] Christian Schuler Are there partnering things ongoing that really support product access for drugs in those markets?

[00:20:16] Robert Dumitrescu We see the first examples of these kind of public-private partnership, especially in areas where you see that health authorities, ministries, payers, where they put a national priority on that and they're willing to kind of go into a partnership with private industry. And so you saw that in the past, I think in primary care, trying to get to a global standard. But also we see that now in specialty medicine space in oncology and rare disease. We see these memorandums of understanding, right? Where a pharma company also is investing, for example, in Indonesia, building hospital capacity for patients with CV events. So that's a major drug manufacturer who signed on for that. Yeah, we really see some of these concrete cases.

[00:20:58] Christian Schuler The million dollar question, Rob, right? What about pricing in these markets? Obviously it cannot be on the same level as in the mature markets, but what are companies doing to prevent that there's some price spillover again from lower priced markets to higher price markets?

[00:21:17] Robert Dumitrescu So it is the million-dollar question, Christian. And it's no perfect answer to that one. Because we also know that even if the major markets are not directly referencing these LMICs that via a complex chain of referencing, secondary referencing, tertiary referencing, these prices can still spill over and eventually end up as references to large markets. So no, no perfect solution. And it's the usual tools, right? It's sequencing, it's tiered pricing, it's second brand strategies. Some companies call those clone strategies, but it's also confidential agreements in those countries. Sometimes even we see the performance-based models in those countries to avoid what's the true net price, what publicly having a low net price, which then spills over into other countries. It's another point which I think is really interesting when it comes to equitable access. It's not only equitable access in LMICs, like we've been talking until now, but I think there's also an equitable access topic, which is really real and which is more significant. I think we see vulnerability being created in patient groups, even in high income markets. We've always had uninsured populations, underinsured populations, but this now this gets even worse, right? The congressional budget office in the US was estimating 10 to 12 million patients, I think, potentially losing Medicaid coverage. Most of it is Medicaid, and some estimates were even more than that. In Europe, we might be seeing the same thing happening, fewer therapies that are getting covered. We know the time to access is already very long, even in some severe diseases with some innovative therapies. Yeah, maybe a larger portion of products or a percentage of the cost of the products not being fully covered by social security systems, by the national payer systems in these countries. That means that the remaining cost is passed on to private insurances. It's not everybody can afford to buy into an additional private insurance. And maybe MFN makes this worse, right? Like we said earlier. If some therapies end up just not coming to market in Europe or in other mature markets, or if they get reserved for later line populations, the most severe cases, the ones with the highest unmet need, or maybe they end up only out of pocket. So I think that's the other side of equitable access that companies now they really need to be thinking about this. There's vulnerable populations also in high income countries. And maybe there's even strangely, right? Maybe there's even some lessons that we learned from LMICs that we can now apply into high income countries.

[00:23:44] Christian Schuler Completely agree. Again, talking about equitable access, of course, is not only low and middle income countries, it's also the vulnerables in developed the markets, especially taking those new developments into account. Let's switch topic a little bit, right? What about business development and licensing in in 2026? We have a significant transaction services practice. In your view as an expert, what are the key trends you're seeing in this space?

[00:24:10] Robert Dumitrescu Yeah. Well, I think pricing and access opportunity when it comes to BDNL and transactions, Christian, it's never been more important as a factor into deal value. And yeah, it's a massively growing part of our business. And I think there's a lot of things we see investors still doing wrong, especially around pricing. They're misjudging future pricing dynamics, how the net prices evolve in particular, with competitive entries, with LCM new indications, with renegotiations, with clawbacks, everything that's eroding the GTN, and particularly the differences between the US and the ex-US markets. We pay a lot of attention to that in the work that we do.

But you asked me about trends. And I think I I also want to talk about China. It gets so much attention in the transaction space. Already in the last few years, it gets attention because we see Chinese biotechs that last 5, even 10 years have really grown into the monoclonal antibody space, the antibody drug conjugate space. We all heard about that already since years. But now the new thing is the Chinese biotechs are just building completely new spaces. They're the ones going into the really differentiated next generation methodologies, next generation mechanisms of action. So the licensing dynamics as a result of this are also changing. We see US companies, we see EU based companies, they're going to China to source the next generation of innovation. And before the pandemic, there's some statistics on that. Before the pandemic, it was something like 5 to 10 deals where international investors were accessing Chinese assets. And in the last 2 years, this balloons to 75, 80 deals every year. Yeah, just external investors into Chinese assets. And part of that is also the speed advantage. One example, there's a company called ESOBiotec. This was a company out of Belgium. They were capital constrained and they originally planned to do a CAR-T trial and they planned to dose some patients in in the West. And they ended up supporting a really small initiated trial in China just to get some proof of concept. And crazy how fast that went, right? And they had some proof of concept already by Q2, and AstraZeneca immediately acquired them, right? For quite a large valuation after they saw that first proof of concept. So really fast. But also, I think some watch outs with China. You do need the boots on the ground in China. There's no good visibility, there's no good source. And many of these companies that I think are potentially very attractive to Western investors are still completely under the radar. And the information is fragmented, provincial level, local incubators, universities, local venture networks. So if you want to source in China, you need the local presence, you need the relationships, you need the on-site meetings, you need to be proactive about scouting out those opportunities. And the other watch out for it is that it's a great source of innovation but usually the China only data sets are still insufficient for the Western regulatory pathways. So you gotta think that behind the proof of concept in China, you're gonna have to do some bridging, you're gonna have to look at some additional cohorts.

[00:27:21] Christian Schuler Really fascinating how quickly China has taken off as a source of true innovation in this, especially when it comes to business development and licensing work. But changing gears, how do you think this most favored nation pricing will shift? Pricing due diligence work, commercial due diligence work and so forth that we're doing. What developments do you see there?

[00:27:43] Robert Dumitrescu It just goes to show that MFN permeates everything now, Christian. And right. I mean, MFN is, I think, just further elevating the requirements, the diligence requirements when it comes to transactions. It used to be quite simple. In many cases, if you were looking at the full global rights, you'd focus heavily on what's the asset worth in the US? And then you'd extrapolate to the rest of the world. Just using a simple percentage on the basis of an analog product, you don't do further diligence on that. I don't think that flies at all anymore. You've got to now look at each of the reference markets. You've got to figure out the most important reference markets. And you've got to figure out, is there a case there? At what price levels? Are we going to put at risk our US business? And you've got to think, right, can I still generate reasonable business outside of the US without overly damaging the US? And another dimension of that is how does the territorial split now evolve in deals? And what I mean by that is US biotechs, right? You oftentimes see them wanting to go alone in the US, right? Commercialize themselves in the US. But then they used to think about how do I license out the ex-US rights to somebody who already has a commercial footprint and an infrastructure to be able to leverage that. And now they're going to have to be very careful about what deal terms they sign on to with another partner. What is the pricing governance look like? Do they wanna even have some clauses in the deal around what the partner is permitted to do or not do on the ex-US prices? So it doesn't endanger the US pricing. And I think that probably reduces the value of ex-US rights if you have that kind of conditionality in the deal.

[00:29:21] Christian Schuler Really, companies are getting more and more cautious when it comes to this.

[00:29:26] Robert Dumitrescu Yeah. And it's not gonna be a one size fits all, right? And I think this is gonna vary by therapeutic area. You've gotta look at each one case by case when you're looking at a deal.

[00:29:35] Christian Schuler Completely agree, Rob. 2026 might be one of the years with the most seismic shifts for the pharma and biotech industry that we have seen in decades, right? I mean, we discussed some of the things. And as we also have pointed out, there are also a lot of opportunities for pharma and biotech companies. So, Rob, thanks a lot for your time. Thanks all for listening to our Simon-Kucher Growth Blueprint podcast on key trends for pharma and biotech industry in 2026. If you have any comments or questions to this podcast, please don't hesitate to reach out to Rob, myself, or any other partner at Simon-Kucher & Partners. Thanks, everyone. Bye bye.

[00:30:12] Narrator Thank you for listening. If you enjoyed this episode, please consider leaving a rating or review. For more insights, visit www.Simon-Kucher.com.