U.S. drug pricing policy linked to some Canadian launch cancellations

President Donald Trump's most-favoured-nation policy, aimed at lowering high U.S. drug prices, is having a mixed effect in Canada according to industry and government reports. The pharmaceutical sector warns the policy will reduce drug availability and raise prices for Canadians. A survey commissioned by the industry lobby group found 16 medicine launches were cancelled in Canada because of the policy. However, the federal agency that reviews drugs for cost effectiveness reports it is on track to assess more submissions this year than last.

Innovative Medicines Canada, which represents patented drug makers, had Ernst & Young survey its members anonymously. The survey of 31 companies identified the 16 cancellations but did not name the specific products involved. "MFN accentuates the vulnerabilities of Canada when it comes to drug launches," said Bettina Hamelin, the group's chief executive officer. Meanwhile, Canada’s Drug Agency states it expects to complete 100 drug reviews this calendar year, a 27 percent increase from the 79 it conducted in 2025.

The agency provides non-binding recommendations to public insurers, which then negotiate prices through the pan-Canadian Pharmaceutical Alliance. Industry data shows 22 percent of these listing negotiations so far in 2026 have failed to reach a deal, double the rate from the previous year. This could indicate companies are pushing for U.S.-level prices that public payers reject. Mauro Chies, CEO of the negotiating alliance, said the current failure rate matches levels seen in other recent years like 2019 and 2022.

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Chies confirmed the U.S. policy has been raised during talks. "MFN has come up at the negotiating table," he said. "I don't think to the prevalence that some people are making it out to be, to be quite honest." He noted it has been mentioned a few times this year, but stressed many factors can cause a negotiation to fail. One example is the drug Vanrafia for a kidney disease, which was approved by Health Canada in July but whose manufacturer, Novartis, later decided not to launch it here.

Novartis has not publicly linked its decision to the U.S. policy and did not respond to inquiries. Innovative Medicines Canada, however, cited Vanrafia in a September government submission as one of three products not launching because of most-favoured-nation rules. The drug treats immunoglobulin A nephropathy and carries an annual U.S. list price of $171,493. It is among several treatments for that condition available in the U.S. but not in Canada, where analyses often question the value for money of such expensive new therapies.

In the U.S., such value assessments are not required before a drug reaches patients, whereas in Canada they are a prerequisite for public insurer coverage. Patient advocate Ruchi Ambike, who lives with the kidney disease, said Canadian patients are commonly prescribed generic steroids like prednisone instead of newer, targeted treatments. "We don't have any of the medications that actually target and therefore stop the progression of IgA nephropathy," she said. Ambike said companies have expressed concern to her about securing reimbursement from public plans given the high cost of new drugs.

Ramy Saleh, a medical director at the McGill University Health Centre research institute, sees similar challenges with expensive cancer drugs. He suspects some companies are using the U.S. policy as leverage to seek higher prices in Canada. "I can't imagine, if a drug is going to cost half a million dollars a year per patient, how are we going to sustain this?" Saleh asked. Ambike said patients ultimately bear the cost of these market tensions. "We really need to look at Canadian patients as worthy and deserving of life-saving treatments, not just market value or numbers," she said.

With files from The Globe and Mail