How ‘Most Favored Nation’ Regime Affects Biopharma Deals
Client Alert | August 31, 2026
This article describes the current state-of-play with MFN and key deal drafting considerations.
Life sciences dealmaking is running at a record pace — straight into a pricing regime that is still being written.
According to Gibson Dunn’s July biopharma M&A survey, the first half of 2026 saw 13 announced acquisitions of public biopharma targets ranging from $1 billion to $25 billion, roughly $66.6 billion in upfront value — an annualized pace exceeding any year in the survey’s history.
Deal structures are shifting too: Per the firm’s July 2026 contingent value rights study, CVRs appeared in under 10% of these deals before 2019, but in 23% to 33% every year since 2023 — and net-sales milestones are brand new, appearing in five deals, all signed in 2025 and 2026. The market adopted its most pricing-policy-exposed milestone structure just as U.S. pricing policy began compressing the metric it measures.
The collision is here: Section 232 tariffs of up to 100% took effect July 31, with relief expressly conditioned on most-favored-nation pricing agreements, and the proposed Global Benchmark for Efficient Drug Pricing Medicare demonstration is scheduled to begin on Oct. 1.
Originally published by Law360 on August 25, 2026, © Portfolio Media. Inc. | New York, NY.
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Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding the issues discussed in this article. Please contact the Gibson Dunn lawyer with whom you usually work in the firm’s Life Sciences or FDA & Health Care practice groups, or the authors:
Margaux Hall – Washington, D.C. (+1 202.887.3605, mjhall@gibsondunn.com)
Branden C. Berns – San Francisco (+1 415.393.4631, bberns@gibsondunn.com)
Karen Spindler – San Francisco (+1 415.393.8298, kspindler@gibsondunn.com)
Ryan Murr – San Francisco (+1 415.393.8373, rmurr@gibsondunn.com)
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