Eli Lilly’s recent decision to hike the UK price of its blockbuster weight loss drug, Mounjaro, by as much as 170% for privately paying patients raises great concerns for African countries as it signals deep fractures in the global pharmaceutical pricing playbook.
Effective September the list price for the highest dose will jump from £122 to £330 (about R7,800). The reason is that Lilly’s move is a strategic riposte to anxieties in the US over “foreign freeloaders” who rely on Americans to foot the bill for innovation.
While the UK National Health Service will maintain its original rate through confidential agreements, the move suggests that pharma giants are feeling the pressure from US domestic policies like most favoured nation (MFN) clauses, which threaten to link American prices to the lowest price pharma charges anywhere else.
That thousands of privately paying Britons will pay 170% more for a life-saving medication each month is a worrying development for patients in less wealthy countries. If Lilly or other pharma companies offer lower prices to low-middle-income countries (LMIC), the White House may demand similar discounts at home.
Underlying this conflict is the principle of differential pricing, a long-standing norm in global pricing of pharmaceuticals whereby pharmaceutical companies set lower prices in poorer countries and higher prices in wealthier markets. This strategy has enabled access to essential medicines in LMICs, especially antiretrovirals for HIV including vaccines supplied through public-private vaccine alliance Gavi.
Similarly, mass procurement via advance market commitments has driven down per dose costs for pneumococcal vaccines to pennies in Africa, and voluntary licensing agreements allow generic manufacturers to supply lower cost versions of patented medicines across many LMICs. Differential pricing has not only lowered costs. It has promoted competition, improved supply chains and scaled public health interventions in places that would otherwise be priced out of reach.
When high income nations adopt MFN clauses they threaten this fragile ecosystem. The US requirement that its domestic medicines prices match the lowest global prices may force pharmaceutical companies to raise prices elsewhere to preserve their margins. This creates a domino effect. The very discounts that made treatment accessible in the Global South suddenly become economically unsustainable.
Pharma companies may pre-emptively withdraw preferential pricing from LMICs out of fear that not doing so could undercut their revenues in the world’s largest pharmaceutical market. That fear is already beginning to materialise with Lilly’s UK price hike.
The unintended consequence? A chilling effect on price differentiation that undermines access for vulnerable populations. LMICs, including African nations, could suddenly find themselves paying far higher prices that may be untenable for their public health systems. If differential pricing is eroded global health gains could be reversed. Antiretroviral treatment, once within reach, might become unaffordable. Vaccine campaigns could be derailed.
The moral contract that enabled billions to receive life-saving medicines risks complete collapse. Worse, pharmaceutical companies might retreat from launching new treatments in poorer countries altogether, fearing global price integration.
The danger of this unravelling is not abstract. It has been faced before. During the HIV/Aids crisis in the 1990s the absence of differential pricing left life-saving antiretrovirals priced out of reach for millions across Africa. Only after years — a decade — of advocacy and the use of the Trade-Related Aspects of Intellectual Property Rights (Trips) agreement flexibilities, such as compulsory licensing, did lower-cost generics become available.
More recently, during the Covid-19 pandemic, initiatives like Covax and patent waivers sought to protect access for low-income countries, though not without delays and limitations. Nevertheless, preserving equitable access now demands more than historical soul-searching. It requires urgent action.
International health institutions like the World Health Organisation and Global Fund have long endorsed differential pricing as an essential tool for health equity. The Medicines Patent Pool and initiatives like Gavi continue to prove that voluntary licences and tiered pricing can coexist with innovation. Eroding price flexibility under MFN frameworks could undermine decades of progress in global health security.
Path forward
So what is the path forward? One option lies in circumscribing MFN policies so they exempt medicines sold in LMICs or under public health licences. Policymakers globally could insist that MFNs apply only towards comparable high income settings, thus preserving price flexibility where it matters most. Global solidarity mechanisms like the Health Impact Fund or expanded support for African pooled procurement could incentivise differential pricing while reducing companies’ concerns about parallel obligations.
For African nations the stakes are immediate. Strengthening pooled procurement across the continent could restore negotiating leverage. Domestic legislation enabling compulsory licences during shortages could provide a necessary safety valve, but it will be unpopular. The best solution might be investment in local generic manufacturing to reduce dependency on multinational pricing strategies. Without such countermeasures pharma’s fear of price convergence may translate into reduced access to essential therapies for African nations.
Eli Lilly’s UK price hike is more than a business manoeuvre. It juxtaposes the tension between American health politics and global equity. If governments and global institutions fail to protect the logic of differential pricing while insulating it from MFN-driven pressures, we risk a world in which the innovation revolution leaves the poor behind.
The solution lies in nuanced policy that safeguards equitable access, promotes transparency and reaffirms that innovation should benefit all, not just those who can pay the most.
Eli Lily’s move is a call to action for policymakers, health advocates and the public alike. Defend the fragile architecture of access to quality safe medicines before it collapses under political expediency.
• Hwenda is founder and CEO of Medicines for Africa.
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