Trump’s Drug Price Push: Europe Faces Higher Costs, Limited Access
US Policy May Force European Healthcare Systems to Pay More for Medicines
The European healthcare sector could soon grapple with increasing drug prices and diminished access to innovative treatments. This potential shift stems from the push by Donald Trump for the global pharmaceutical industry to lower medicine costs within the United States. Experts are cautioning that this strategy could have significant repercussions across the Atlantic.
The Price of American Bargains
Trump’s “Most Favored Nation” policy is at the heart of negotiations. The administration is pressuring drug manufacturers to voluntarily slash prices for American patients. To offset potential losses from US price cuts, drugmakers might seek higher prices in Europe. They may also delay launching new medications in markets where prices would be significantly lower.
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“The idea being that if Europeans pay more for drugs, then Americans can pay less for drugs.”
—Dustin Benton, Managing Director at Forefront Advisors
In 2024, the United States spent $603 billion on prescription drugs, representing 17% of total healthcare spending. The implications of Trump’s approach could significantly impact this figure (Centers for Medicare & Medicaid Services).
Policy and Pushback
The initiative, outlined in a May executive order, is influencing negotiations regarding changes to the UK’s drug pricing agreement. The pharmaceutical industry is leveraging this policy to justify price increases to the National Health Service (NHS). The industry fears that agreeing to lower prices with the NHS could lead the US to demand similar cuts.
While the UK may resist major changes to its drug valuation methods, it could frame any alterations as a win for Trump. The EU may find it difficult to include drug price promises in a potential trade deal with Washington. The UK-US trade agreement includes a commitment from London to “endeavor to improve the overall environment for pharmaceutical companies.”
Richard Torbett, chief executive of the Association of the British Pharmaceutical Industry, views the Most Favoured Nation policy as a validation of the long-standing argument that the UK misses out on investment due to low drug prices.
The Road Ahead
As drugmakers and the US administration negotiate, the sector faces potential legal challenges if initial voluntary adjustments fail. A court previously halted the policy under Trump, citing inadequate consultation. The US push to lower drug prices could reshape the dynamics of medicine pricing worldwide.
