Key facts
- Belgium's deputy PM urged the EU to use its "trade bazooka" against the U.S. over drug pricing.
- The U.S. is pressuring European nations to pay more for medicines via its "most-favored-nation" policy.
- Washington argues that Americans fund most pharmaceutical R&D while Europeans benefit.
- A Section 301 investigation into Germany's drug payments could lead to tariffs exceeding 15%.
- European ministers discussed forming an EU-wide pharmaceutical task force.
- Prices could triple in benchmark countries while U.S. prices fall 7.5% to 15%, according to one forecast.
Belgium's Deputy Prime Minister Frank Vandenbroucke has called on the European Union to prepare its "trade bazooka," the Anti-Coercion Instrument, to counter U.S. pressure on drug pricing. In a position paper, Vandenbroucke and his deputy head of cabinet Gloria Ghéquière argued that the EU should also consider suspending tariff concessions granted under the Turnberry trade deal if Washington imposes additional duties on European goods.
The Trump administration's "most-favored-nation" policy aims to align U.S. drug prices with those in other wealthy nations, asserting that Americans disproportionately fund pharmaceutical research and development. The policy ties U.S. drug prices to the lowest rates in countries like France, Germany, and Italy, and has led to agreements with 26 pharmaceutical companies. The U.S. has also launched an investigation into Germany's drug payment practices, which could result in tariffs exceeding the agreed 15% ceiling.
European nations are coordinating their response, with ministers from eight countries discussing the formation of an EU-wide pharmaceutical task force. Vandenbroucke's paper suggests that opening an Anti-Coercion Instrument investigation would have a significant effect, even if the procedure is lengthy. The authors also highlighted a clause in Pfizer's agreement that requires sharing additional revenue from higher foreign prices with the U.S. government, questioning the policy's net effect on European drug prices and universal insurance solidarity.