MFN, Tariffs, China: What’s real now and what’s next?
Had several spontaneous (and fun) chats lately on MFN and CN. Given the interest, I would like to share my brief perspectives to fuel more discussion.
1. MFN/Tariffs are part of a bigger shift in GTM planning
We are facing greater uncertainty, bigger policy swings, and intensifying competition, driven by localised situations (e.g., FDA restructuring, tariffs), and global trends (e.g., AI and CN accelerating innovations). While our framework for GTM planning stays, the inputs, scenarios and timeframes to consider, trade-offs, and hedging considerations change considerably. Above all, we need to level up speed and quality of decisions
2. Limited near-term P&L impact from MFN/tariffs
Earnings have largely already adjusted. Recent deals offer high visibility but limited impact (e.g., flu pills for a slice of a ~$300M drug, cash-pay where most don’t pay cash). DTC need time to clear logistical hurdles for ‘mass-market impact’. The changes are real, but impact is not immediate
3. Longer-term, the chessboard changes.
The cumulation of forces (US politics, China’s rise, patent cliffs, paradigm-disrupting modalities) gives momentum to things on the table for years (NICE revamp, anyone?) Some changes may include:
DTC will grow - but not as marketed today. Current pilots aren’t for mass market. Hybrid models will grow (manufacturer platforms, vetted telehealth, employer navigation), varying by region. Expect more experimentation (e.g., WeightWatchers/Amazon, Optum Rx employer plan, CN’s JD AI hospital) driven by politics but also need to differentiate with increasing competition
“Beyond-the-pill” is huge battleground. GLP-1s and similar raised bar on patient experience; we are in the Rx-consumer market. Historically, regulations, limited tech, and low investment appetite limited growth, but rising pressures will force innovation (CN is arguably ahead here!)
EU/CN elevated to US priority. Earlier-stage NPP, forecast, trial design, launch planning, etc. often focus on US. US remains main market, but timing for considering EU/CN must move up. MFN/reference pricing, impact of trial design on regional opportunities, regulatory disparities, political lens on CN, are examples that necessitate earlier glocal planning
Integrated CN-US/EU expertise is table stakes. Question isn’t “why”, it’s “how”. CN BD&L carry a higher risk. I will expand on the root causes in a follow-up. The key to success is:
Two-way fluency: CN+US/EU expertise (CN alone is not enough) to gauge real value in local markets and bridge cross-border perspectives
Consider volatility: Know what could swing (e.g., NRDL changes, US+CN biosecure, tariffs) and how much (e.g., CTx regulations forcing trial redo, CN data ownership restrictions)
Investment clarity: Be explicit on goal (market entry, faster/cheaper PoC, build durable leadership), timelines, gates, and backup plans