Big Pharma Trump toadying stores up bigger battles

CStone Pharmaceuticals

11/11/2025 10:21

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

By Aimee  Donnellan

DUBLIN, Nov 11 (Reuters Breakingviews) - Big Pharma’s bid to neutralise Donald Trump's war on drug prices is storing up a painful headache elsewhere. Large drugmakers like Novo Nordisk NOVOb.CO, Eli Lilly LLY.N, Novartis NOVN.S , Roche ROG.S and AstraZeneca AZN.L have been scrambling to announce new factories stateside and pledging to cut U.S. treatment prices in a bid to avert tariffs. One side effect of the strategy is that they may launch fewer drugs in Europe, in turn prompting a backlash from continental lawmakers.

Pharmaceutical bosses have little choice but to kowtow to Trump. The U.S. is the number one drug market in terms of sales thanks to a dysfunctional healthcare model that sets prices far above those in other countries. With the threat of tariffs, Trump is rapidly inking deals which will see drugmakers lower prices for Medicaid, the government-backed healthcare programme, to match the cheapest level in other countries.

Pharma bosses fear this so-called “most favoured nation” commitment more than anything. If they were to charge Americans the same rate as Brits or Germans, they could end up shaving up to 90% off the value of their U.S. drug prices. But there is a partial fix: they can simply withdraw drugs from the European market to avoid any like-for-like comparisons, and thus keep U.S. prices elevated, especially for new, more expensive treatments. Over the last five years, 40% of new U.S. medications have not yet been launched on the continent, according to data from IQVIA.

The deals negotiated with Trump may see that trend accelerate. This means that breakthroughs in cancers and other ailments may not be immediately available to European patients. One CEO of a European pharmaceutical company told Breakingviews that he expects the continent's politicians to see the error of their ways and desperately pay up for drugs once citizens are unable to access lifesaving treatments.

This thinking, however, assumes European governments can afford higher drug prices. But the reality is politicians struggling to balance their books, such as in France and Britain, may not be willing to pay up for treatments that are only marginally better than the current offering. They may also be picky over which firms they support, prioritising those with domestic factories or research labs. And the more Big Pharma withdraws from Europe, the greater the chance of a backlash from angry citizens.

Politicians may also look for alternatives. China’s biotechs are churning out new drugs more quickly than any other country. Nearly a third of the world’s clinical trials are taking place in its second largest economy. European lawmakers are also warming to Chinese drugs. In August the European Commission approved a small-cell lung cancer drug made by Shanghai-based CStone Pharmaceuticals 2616.HK. Big Pharma CEOs may be hoping that by shunning Europe, lawmakers will realise their value. But they may end up swapping one political headache for another.

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CONTEXT NEWS

U.S. President Donald Trump, Eli Lilly and Novo Nordisk unveiled a deal on November 6 to slash the prices of popular GLP-1 weight‑loss drugs for the government's Medicare and Medicaid programmes, as well as for cash payers.

The cuts, which the government said would reduce prices to between $149 and $350 a month on average for Americans, are aimed at increasing access to the treatments to millions more people. Current costs range from $500 through direct sales to a retail price of $1,000 per month.

On September 30, Pfizer and Trump said they had cut a deal in which the U.S.-based drugmaker agreed to lower prescription drug prices in the Medicaid programme to the same level it charges in other developed countries, in exchange for tariff relief.

On October 10, AstraZeneca struck a similar deal with the White House.

The number of European drug launches has collapsed in the past 10 years https://www.reuters.com/graphics/BRV-BRV/byvrblewdve/chart.png

(Editing by Neil Unmack; Production by Shrabani Chakraborty)

((For previous columns by the author, Reuters customers can click on DONNELLAN/Aimee.Donnellan@thomsonreuters.com))