Trump: Trade Will Convince EU to Accept Higher Drug Prices
President Donald Trump touted his plan to get foreign health purchasers to pay more for pharmaceuticals, and U.S. consumers to pay less, as he signed an executive order seeking to equalize those prices.
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According to the National Institutes of Health, U.S. prices, adjusting for rebates paid to pharmacy benefit managers and insurers, on name-brand drugs are 308% higher here than in other developed countries, while generic drugs are cheaper. Foreign countries spend about a third more than U.S. consumers on generics -- and in the U.S., generics are 90% of prescription volume.
The executive order said, "Drug manufacturers, rather than seeking to equalize evident price discrimination, agree to other countries’ demands for low prices, and simultaneously fight against the ability for public and private payers in the United States to negotiate the best prices for patients. The inflated prices in the United States fuel global innovation while foreign health systems get a free ride."
The order instructs the commerce secretary and the U.S. trade representative to take action "to ensure foreign countries are not engaged in any act, policy, or practice that may be unreasonable or discriminatory or that may impair United States national security and that has the effect of forcing American patients to pay for a disproportionate amount of global pharmaceutical research and development, including by suppressing the price of pharmaceutical products below fair market value in foreign countries."
Trump, at his press conference, put it more plainly. He said EU countries tell pharmaceutical firms that their health systems won't buy their new drugs unless they offer a certain level of discounts. He said the EU will have to make those offers more generous. "If they want to get cute, they won't sell cars into the U.S. anymore," he said. "We have all the cards. They sell us 13 million cars, we sell them none."
The real figures, according to the European Automobile Manufacturers' Association, are that 757,654 cars were exported from the EU to the U.S. in 2024, while Europeans imported 169,152 U.S.-assembled cars.
Trump said poorer countries will be allowed to pay less for medicine than the developed world, but for similarly situated countries, "they're going to have to pay more for healthcare, and we're going to pay less. Special interests may not like this very much, but the American people will."
"We will add it on to tariffs, if they don't do what is right," he added.
The executive order says that if pharmaceutical companies do not agree to price targets -- developed in the next 30 days -- based on prices across developed nations, the FDA could "potentially modify or revoke approvals granted for drugs, for those drugs that [may] be unsafe, ineffective, or improperly marketed." It said the Commerce Department shall "consider all necessary action regarding the export of pharmaceutical drugs or precursor material that may be fueling the global price discrimination."