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AmextaFinance > News > Trump seeks to lower US drugs prices with tariff threat to Europe
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Trump seeks to lower US drugs prices with tariff threat to Europe

News Room
Last updated: 2025/05/12 at 12:23 PM
By News Room
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President Donald Trump has vowed to force European countries to pay higher drug prices while squeezing pharmaceutical companies to lower prices for US consumers by as much as 80 per cent.

Speaking at the White House on Monday, Trump said his administration would punish countries that refuse to “equalise” their medicines prices with the US or that “extort” drug companies into lowering their charges.

The threat, which included imposing trade sanctions on nations that do not co-operate, opens a new conflict with US trading partners following Trump’s “liberation day” tariffs imposed across the world last month.

“We’re going to tell those countries, like those represented by the European Union, that the game is up, sorry,” Trump said. “And if they want to get cute, then they don’t have to sell cars into the United States any more”.

Trump on Monday signed an executive order that the White House said would “communicate price targets to pharmaceutical manufacturers” and cut out “middlemen” by allowing patients to buy directly from drugs manufacturers.

The president wants to reduce US drug prices to the lowest price available worldwide. US patients have historically paid much higher prices for drugs than their peers in other industrialised countries.

Trump’s directive could hurt US pharmaceutical companies, which have lobbied for years to preserve the American pricing system. During his first term, Trump proposed price controls for drugs, but this was defeated in court. Democrats have also tried to rein in drug costs. Trump’s latest proposal faces a similar struggle, analysts said on Monday.

Trump said the price premium for medicines in the US meant Americans were paying an undue share of pharmaceutical company research and development costs.

He said the US trade representative and commerce department would be directed to probe nations that “extort drug companies by blocking their products unless they accept . . . very low dollar amounts”.

“This means American patients were effectively subsidising socialist healthcare systems in Germany, in all parts of the EU — they were the toughest of all. They were nasty,” Trump said. “Basically what we are doing is equalising.”

Unlike in Europe, US government-backed insurance programmes cannot negotiate certain drug prices with pharmaceuticals companies. Former president Joe Biden’s Inflation Reduction Act allowed Medicare, the public insurance programme for seniors, to do this for the first time for some medicines.

The US paid about 3.2 times more for branded drugs than other developed countries in 2022, according to research by RAND Healthcare for the country’s health and human services department.

Trump’s announcement has kicked off a fight with the pharmaceutical industry. The Biotechnology Innovation Organization, a US lobby group, said Trump’s plan was akin to “importing socialised medicine.”

“Patients and families are not a bargaining chip in a trade war, but that’s exactly how they are being treated,” it said on Monday.

Share prices for US pharmaceutical companies rose with broader stock index gains.

Read the full article here

News Room May 12, 2025 May 12, 2025
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