The Potential Role of Outcomes-Based Agreements in Mitigating MFN Risks in Small-Population Countries: Spot-Light on Denmark

PRICING

29 Jun 2026

Earlier in June, Denmark’s newly formed 4-party coalition government presented its manifesto where it reiterated the previous government’s commitment to establishing an MFN monitoring task force. Importantly, the coalition government highlighted the need to “strengthen Denmark’s position as a leading life sciences nation and ensure that research, innovation and the healthcare system work more effectively together”. In terms of tangible impact, it has set a target to increase public spending on research to at least 1% of GDP¹. In parallel, the Danish Medicines Council (DMC), responsible and clinical evaluation of novel high-cost hospital drugs, has also sent positive signals to the industry on drug pricing. Moving forward, pharma companies will have more time to propose alternative pricing agreements / managed entry agreements (previously, companies were only able to propose such agreements along with their data submission package). Birgitte Klindt Poulsen, Chair of the DMC noted that “we are willing to go to great lengths to encourage companies to enter into alternative agreements that make it possible to offer new treatments to patients, even though there may be uncertainty regarding their efficacy and the costs to the health service. That is why they are now being given the opportunity to put their proposals on the table right up until the first meeting of the specialist committee.” The updated guidelines highlight that proposals must include factors relating to the implementation and administrative costs associated with the agreement, especially if they are outcomes-based².

Denmark had previously signalled its openness to engaging in outcomes-based agreements having published guidance on how pharmaceutical companies should approach them within the Danish P&R process back in 2022. This also highlighted at the time the common challenges for their implementation, with the administrative burden of clinical outcomes data collection, especially for large disease populations being a key obstacle³. But, the recent announcement by the DMC appears to signal that healthcare authorities are willing to work more closely with pharmaceutical companies to increase their use.

It is noteworthy that the latest policy updates from the government and the DMC have come up not long after Amgen decided to withdraw Repatha (evolocumab), a cholesterol lowering drug, from the Danish market after winning a competitive public tender, citing MFN pressure given that Denmark is a reference country within the MFN framework⁴.

Do the Danish authorities think that outcomes based managed entry agreements can help mitigate the effects of MFN on drug launches in the country? If so, they may be on to something.

Outcomes based agreements can help ease the pressure on MFN reference nations, such as Denmark, by allowing them to accept both higher list and net prices, thereby remaining priority launch markets for new medicines, whilst not having to pay for treatments when they fail to achieve target outcomes in individual patients or patient cohorts. However, for more prevalent conditions, payers may be more averse to outcomes-based agreements given the administrative burden, human resource requirements, and costs associated with data collection and analysis. In these cases, payers typically revert to simple financial discounts which are not conducive to MFN risk mitigation. As such, outcomes based agreements are typically reserved for high cost therapies targeting smaller, clearly defined patient populations such as orphan drugs and novel anticancer therapies.

Denmark’s current population stands at 6 million⁵, a small fraction of the populations of other European MFN reference nations, such as Germany (current population ~83.5 million⁶). This puts it in somewhat of a “sweet-spot” for successfully implementing outcomes based agreements for medicines even when they are targeting a relatively common disease such as lung cancer. To put things into perspective, albeit based on some crude calculations, Denmark saw 5,259 new diagnoses of lung cancer in 2023⁷, while Germany saw 58,340 new cases⁸. That is more than a 10-fold increase in the addressable population size for a hypothetical treatment targeting lung cancer patients in each country. The lower absolute patient number in Denmark (in addition to the ongoing trend for targeted treatments for narrower population subgroups across therapy areas based on biomarkers/genetic features), supports the overall administrative feasibility of outcomes based managed entry agreement design and implementation in this country. Additionally, the emergence of AI over the past few years will likely reduce some of the administrative burden on healthcare professionals for data collection as part of the administration of an outcomes based agreement. Ultimately, this can provide Denmark with a great deal of leverage to raise list and net prices for medicines while ensuring that the expenditure provides optimal value given that costs are only incurred when treatments provide the expected outcome.

It remains to be seen how much of an uptick in outcomes based managed entry agreements Denmark will see over the coming year or two, and importantly, what impact they will have on drug launch considerations for pharmaceutical companies. What does seem certain is that outcomes based agreements are here to stay, and implementation will eventually evolve to become faster and less burdensome.

At Lighting Health, we have been closely monitoring the evolution and impact of MFN and continue to work with our clients on identifying optimal access and pricing strategies for their medicines. Don’t hesitate to reach out to us if you have any questions on the topics explored in this article.

Article by: Nader Mourad

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The Potential Role of Outcomes-Based Agreements in Mitigating MFN Risks in Small-Population Countries: Spot-Light on Denmark

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