Former President Trump's "most favored nation" (MFN) drug pricing policy, aimed at reducing US prescription drug costs, is creating significant challenges for access to new treatments in Europe. Under this policy, US public health programs pay the lowest price charged in other developed countries. This forces pharmaceutical companies to choose between slashing their US prices or convincing European nations to pay more. Some companies are reportedly considering a third, more drastic option: bypassing parts of Europe entirely. For instance, Roche's new breast cancer pill, giredestrant, will launch in the US first, and its availability in Switzerland, a key reference country for the MFN policy, is uncertain.
The policy's impact is already evident. GlobalData, a research firm, observed a 35% decline in new drug launches in Europe during the 10 months following Trump's May pricing announcement, with an even steeper drop in countries used for US comparison. Biogen's new postpartum depression medicine, Zurzuvae, is expected to be launched in only three or four European countries initially, rather than across all 27. Darius Lakdawalla, chief scientific officer at the USC Schaeffer Institute, estimates that introducing a treatment in Europe could halve the product's US price under MFN, making companies likely to forgo European markets to preserve over 30% of their US profits.
While the MFN policy aims to deliver substantial savings in the US—President Trump claimed reductions of $600 billion and price cuts by "50, 60, 70, 80 per cent"—experts like Dr. Thomas Hwang from Brigham and Women's Hospital suggest long-term savings might be "illusory." Companies may raise prices in other countries to keep the benchmarked prices higher. Indeed, the UK has already agreed to cover drugs at higher prices. Furthermore, pharma companies have committed to significant investments in US manufacturing, with nine new signatories agreeing to invest at least $19.6 billion collectively. Some are also donating active pharmaceutical ingredients to an emergency reserve to reduce reliance on foreign nations.
