Trump Considers Forcing Drugmakers to Match European Prices

The Trump administration is contemplating a regulatory move that could force pharmaceutical companies to lower US drug prices to match those in other wealthy countries, according to a notice posted on a federal website. The proposed rule, referred to as the “global benchmark for efficient drug pricing (GLOBE) model,” aims to create a level playing field for drug pricing globally.

Although the notice was briefly taken down on Thursday, only to be republished later, it suggests that the administration is serious about tackling the issue of high US drug prices. President Trump has long been vocal about his desire to see US prices aligned with those in peer countries, and his Medicare agency had previously launched a pilot program to test this approach in a small category of drugs.

However, the pharmaceutical industry is likely to fiercely oppose such a move, which could significantly cut into their profits. “Importing foreign price controls would undermine American leadership, hurting patients and workers,” said Alex Schriver, a spokesman for the Pharmaceutical Research and Manufacturers of America (PhRMA). Instead, Schriver suggested that foreign countries should be encouraged to pay their fair share for innovative medicines.

In July, President Trump set a deadline of September 29 for drugmakers to voluntarily lower their prices, as outlined in an executive order. The order stated that if voluntary compliance did not make sufficient progress, the administration might propose a rule-making plan to impose most-favored-nation pricing. This approach would tie US prices to those in peer countries.

Several drugmakers have recently made announcements to appease the Trump administration, although they have stopped short of committing to lower prices for US government programs, employers, and insurers. Eli Lilly, for example, said it would raise the sticker price of its popular weight-loss drug Mounjaro in Britain, while Bristol Myers Squibb announced plans to set the same sticker price for a new schizophrenia treatment in both the UK and US.

The possibility of a mandate to lower US drug prices to European levels is a major concern for the industry, which faces threats to its business model from the Trump administration. The industry is still bracing for the possibility of Trump’s long-promised tariffs on imported medications and a regulatory process that could remove drug advertisements from TV.

In recent weeks, Trump officials have promoted the idea that European countries are paying too little for medicines. Commerce Secretary Howard Lutnick, for instance, criticized Switzerland, home to giant multinational drugmakers like Roche and Novartis, for generating substantial profits from sales in the US market.

Some pharmaceutical executives, such as AstraZeneca’s CEO Pascal Soriot, have expressed agreement with the president’s goal of leveling drug prices between the US and its peers. Soriot suggested that research and development costs should be shared more fairly across rich countries.

The brand-name drug prices in the US are, on average, three times higher than those in peer nations. The high US prices and the large size of the US market are key to the industry’s business model, which has been criticized by Trump and his allies as unfair. As the administration considers its next move, one thing is clear: the pharmaceutical industry is in for a bumpy ride.