With drug pricing now embedded in U.S. policy, business development teams in biotech and pharma are changing the way they strike deals, including acknowledging policy uncertainties with renegotiation clauses.
President Donald Trump—the self-proclaimed “Dealmaker-in-Chief”—has rewritten the rules of biopharma negotiations with his Most Favored Nation drug pricing policy.
With the policy, which requires companies to price drugs in the U.S. on par with other high-income nations, dealmakers are demanding more flexibility and a higher price, a panel of experts said on the opening day of the BIO 2026 Convention in San Diego.
“You might just take Germany and U.K., and leave everything else out,” Deepa Talpade, head of business development and licensing at Bayer, said of a hypothetical strategy. “It’s pretty drastic, and you set a higher price for that.”
That’s because to maintain “premium pricing” in the U.S., companies will have to forgo drug launches in other countries, said panelist Anamaria Sudarov, managing director for the healthcare investing banking division of Wells Fargo. Instead of rolling out drugs sequentially in the U.S. and then around the world, companies are shifting their focus to America alone since it’s the biggest market.
Indeed, many companies, including Bayer and United Therapeutics, have said that they are considering avoiding that scenario by skipping certain countries in Europe.
When it comes time to write a collaboration or M&A deal, that lack of ex-U.S. market access has to be priced in, Talpade explained.
“You basically need the freedom and flexibility to give up ex-U.S.,” she said. “It isn’t anybody’s dream—by the way—because access and patient service is the whole point of this industry, right? So it’s not something we’re enjoying, but you need the flexibility in that contract.”
Previously, biotech companies would negotiate a deal by taking certain indications and signing off ex-U.S. rights. But that can’t work in an MFN world.
“Why would you risk a different pricing team acting on your behalf in Europe?” Talpade said. “You, as a biotech that wants to grow, will be challenged by saying we’ll keep the U.S. market and somebody else will make money for us ex-U.S.”
Dirty words in dealmaking
The MFN policy has created significant uncertainty for dealmakers. Chad Diehl, legal team lead for licensing and acquisitions at Astellas Pharma, said they can’t perfectly price in the risk to the deal terms given the many unknowns.
“We have to factor [policy risk] in when we’re presenting to management, but because it’s an unknown, it’s not flowing through to the financial evaluations that’s on paper,” Diehl said.
This becomes problematic when trying to negotiate a deal because a biotech’s advisors will say that the matter isn’t relevant to the current market.
“Let’s just understand there’s this massive thing out here that could grow the economics of what we’re talking about underwater, and how will we address that if it happens?” Diehl asked.
One way is to set out terms to renegotiate the deal down the line—which has long been a nonstarter among legal counsel in the business, according to Casarine Chong, general counsel for R&D and business development at CSL.
“Everyone thinks it’s a dirty word. I don’t think it is,” Chong said. “You can either wait for the renegotiation to occur organically, or you can bake it into the agreement.”
If renegotiation isn’t an option, Diehl said, the matter will turn to litigation. Now, his company has been discussing renegotiation from the outset, even adding clauses for arbitration—another “dirty word,” he noted—that sets terms for a new discussion down the line.
