US Drug Pricing Could Raise Costs in Europe

A study published in The Lancet warns that US President Donald Trump’s drug pricing policy could force pharmaceutical companies to raise prices in the European Union or delay the launch of new medicines on the European market, according to Euractiv.

Since last year, Trump has struck agreements with several pharmaceutical companies based on the “most-favored-nation” principle. The aim is to bring drug prices under the US Medicare program closer to those in selected wealthy countries.

The study compared estimated US prices for 195 brand-name drugs with prices in 19 reference countries. For around three-quarters of the drugs, the revenue lost in the US by matching a lower price in a reference country would exceed the drug’s sales revenue in that country. According to the authors, manufacturers therefore have a strong incentive to raise prices outside the US.

European countries are consequently coming under pressure, but their ability to pay higher drug prices is limited. The European Commission said it was still too early to draw reliable conclusions about the consequences of US policy. Health Commissioner Olivér Várhelyi expects a clearer picture in about six months.

The issue is also likely to be discussed when EU health ministers meet in Dublin in late September.

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