Tariff threats are working, the president declared, crediting them with forcing pharma companies and foreign governments to accept his most-favoured-nation pricing plan. Instead of driving prices sharply lower in the US, however, it could push them up for everyone else.
Nine more drugmakers signed Donald Trump’s drug pricing deal on Monday, taking the total to 26. The US president said the rest of the industry will follow. “They have no choice.” The European Commission is now assessing what Trump’s pricing policy could mean for Europe, where the pharmaceutical market is the world’s second largest.
The 26 companies now cover 89% of the branded drug market. – White House
Under the most-favoured-nation (MFN) policy, American public health programmes pay the lowest price charged in other developed countries. The nine new signatories are Alcon, Astellas Pharma, BeOne Medicines, BridgeBio, CSL, Kyowa Kirin, Sun Pharma, Teva Pharmaceuticals and UCB, all mid-sized, where the first 17 were the industry’s largest manufacturers.
What it means for Europe
The policy could have consequences for access to medicines in Europe. The study in Health Policy Open warns that pharmaceutical companies may respond to US reference pricing by raising prices in European markets, particularly in countries where medicines are sold more cheaply, to protect their revenues.
Rather than lowering US prices to the level of the cheapest European markets, manufacturers could seek to bring European prices closer to those in wealthier countries such as Germany and France. That would weaken the savings that the US policy is meant to deliver. “The model predicts that international reference pricing would result in small price decreases in the US, but large price increases in referenced countries, for the products where the firm has strong bargaining leverage,” the analysis concludes.
The European experience also shows that lower prices on paper do not necessarily translate into better access. Companies may cancel or delay launching new medicines in lower-price European markets, or withdraw existing products from those markets altogether. This could further widen the gap in access to innovative medicines between richer and poorer European countries, the study suggests.
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There are also concerns that lower returns in Europe could make the region less attractive for pharmaceutical investment, potentially affecting decisions on where companies locate research, development and manufacturing.
Early signs of pricing pressure and possible launch delays are already being watched in Europe, although it remains too early to establish a direct link to the US policy. The European Commission document, written this summer for health ministers and obtained by Euractiv, concludes that it is “very difficult if not impossible, at this stage, to isolate any effects”.
Largest reduction in the history of medicine
Only one of the nine drugmakers has its global headquarters in the United States: BridgeBio, in Palo Alto, California. And only one is headquartered in the European Union: UCB, in Brussels. Alcon and BeOne Medicines are headquartered in Switzerland.
The 26 companies now cover 89 per cent of the branded drug market, according to the White House. President Trump put it at “90 per cent of the domestic pharmaceutical market”, and Health Secretary Robert F. Kennedy, Jr. said they “cover 9 out of the 10 drugs that are used by Americans”.
The companies still outside will be named soon, the president said. “We have a small group that isn’t, but they will be very shortly. And their names will be announced.”
He set out the case in three numbers. “The United States represents less than 5 per cent of the global population and only consumes 13 per cent of all prescription drugs,” he said. “Yet, for years, pharmaceutical companies have taken 75 per cent of their profits from the United States.”
He said prices had been cut “by price differences of 400, 500, and even 600 per cent” and would fall by “50, 60, 70, 80 per cent”, calling the deals “the largest reduction in prescription drug prices in the history of our country and in the history of medicine” and putting the savings at more than 600 billion dollars.
What the agreements contain
Every state Medicaid programme, the public insurance scheme for Americans on low incomes, gets access to the nine companies’ most-favoured-nation prices. The medicines covered treat haemophilia, Parkinson’s disease, macular degeneration, glaucoma, liver disease, skin conditions and several forms of cancer.
The agreements “ensure foreign nations can no longer use price controls to freeride on American innovation by guaranteeing MFN prices on all new innovative medicines the nine companies bring to market”, the White House says, and each manufacturer has agreed to “fundamentally rebalance international drug pricing”.
President Trump described the mechanism as automatic. “Anybody that’s lower than us, we therefore meet that price. So it’s like a downward spiral,” he said.
Nineteen billion dollars and the strategic reserve
The second half of the announcement is about supply. The nine “committed to invest at least $19.6 billion collectively in US manufacturing in the near term”. Four are donating active pharmaceutical ingredients to an emergency reserve, which the White House says exists “to reduce reliance on foreign nations”.
The reserve was created by executive order in August 2025 and is run by the Administration for Strategic Preparedness and Response. The order aims to “insulate the United States from the concentration of foreign, sometimes adversary, nations in the world-wide supply” of the starting materials for medicines.
President Trump said the reserve was already close to full. “We have a strategic reserve that is amazing that a lot of people don’t know about, but they’ve just built it up, topping it out,” he said, and framed it as preparation for conflict: “So we have an emergency, including wars and lots of other things. We are fully equipped to handle it.”
The written announcement itemises the donations: UCB 163 tons of levetiracetam, an anticonvulsant; Sun Pharma 71.4 tons of clindamycin and 6.75 tons of doxycycline, both antibiotics; Teva 45 metric tons of metronidazole and 4.8 tons of amlodipine, a blood pressure medicine; and Astellas 25 kilograms of tacrolimus, which stops organ rejection after a transplant. Astellas said it would donate the active substance for tacrolimus “to ensure that we secure our supply”.
The tariff deadline
The nine signed on 31 August. On 29 September, a 100 per cent American tariff on patented medicines takes effect. A proclamation of 2 April 2026 set two dates, one in July for a named group of manufacturers and 29 September for everyone else. European medicines face 15 per cent instead, under the Turnberry agreement of July 2025. Companies with a pricing and manufacturing deal pay nothing.
We want these companies to reshore, right? We need our drugs made in America, and then that brings jobs and investments in America. – Howard Lutnick, United States Secretary of Commerce
The president was explicit about what brought the companies to the table. “These deals, one of the reasons is tariffs, I hate to say,” he said. Commerce Secretary Howard Lutnick put it in terms of security: “We want these companies to reshore, right? Because reshoring produces national security, right? We need our drugs made in America, and then that brings jobs and investment in America.”
Trump: France agreed to “double and triple” its prices
“We were ripped off by the pharmaceutical companies, and we were ripped off more than anything by other countries throughout the world,” the president said.
Asked why he had succeeded where earlier administrations failed, the president named a country. “Everybody said it would be impossible for France to agree to double and triple their drug prices, but they agreed to do it, and they agreed to do it because I said, if you don’t do it, I’m going to put tariffs on everything coming into the United States, and that is far bigger dollar-wise than the money we’re talking about,” he said.
He stressed the threats were what made the agreements possible. “We have the right to cut off all business with a country, and I threaten that also. And without the power of tariffs or the power of not doing any business at all, whether cutting them off from the United States, I would have never been able to have gotten them to agree.”
He put figures on the increases. “They’d have a $10 pill, and it would go to $20. Or they’d have a $40, and they’d raise it from $40 to $60,” he said. Earlier he had asked why Americans paid ten times more for a medicine “than they were paying in Düsseldorf”.
Europe’s UCB: a two billion dollar plant in Georgia
UCB is the only signatory headquartered in the European Union. “Today, we are making the largest manufacturing investment that our companies have done with a $2 billion facility in Georgia,” the company told the president.
“Mr President, you have been clear about the necessity to invest into innovation, and we share this commitment,” it said. “And it’s very important to think that the breakthrough of tomorrow will need and depend on the investment that we are making today.”
UCB also said it was “strengthening American supply in times of emergency” by donating Keppra, “an essential anti-seizure medicine”, to the national stockpile, and that it was “proud to continue to invest in science, in manufacturing, and in people and talent in order to improve patient life for their generations to come”.
From the podium, UCB said nothing about prices. In writing, it commits to “take a more balanced pricing approach for future medicine launches across developed nations”, and to join the US Medicaid pricing scheme. In return, the company “will not be subject to Section 232 Pharmaceutical tariffs on all current products or future pricing mandates”. Specific terms, it says, remain confidential.
What some of the companies said
Astellas said its pricing for new medicines would be aligned with global markets. BeOne Medicines pledged to price future medicines in the United States in line with other key developed markets, and put its American investment at nearly $11 billion in research, development and manufacturing through 2029, more than half the total announced for all nine companies.
We want to bring the clinical trials home. We want every part of clinical research, clinical trials done here in America to both protect our national security and to make it more affordable. — US administration official
CSL said it supported the agreements as a way to lower medicine prices and strengthen American manufacturing. The company employs close to 19,000 people across 44 states, and pointed to a planned $1.5 billion expansion in Illinois that will bring its plasma production onshore end to end. That expansion was announced in March, five months before the agreement.
Kyowa Kirin said five per cent of the medicines it makes in the United States currently go to American patients, a figure it expects to exceed 95 per cent within two years. BridgeBio said the partnership would let it reinvest in technology and innovation on American soil.
The press conference also turned to clinical research. “We do have real problems with other countries eclipsing us in where early stage clinical research is happening,” an administration official said.
“There’s a lot more happening in your administration to not only bring the manufacturing home, but we want to bring the clinical trials home. We want every part of clinical research, clinical trials done here in America to both protect our national security and to make it more affordable.”
How the policy got here
The policy began with an executive order of 12 May 2025, “delivering most-favored-nation prescription drug pricing to American patients”. On 31 July that year the president wrote to 17 leading manufacturers setting out the steps they had to take.
All 17 have since signed. Pfizer was first, on 30 September 2025, and nine more followed on 19 December. TrumpRx.gov, where patients buy directly at most-favoured-nation prices, launched on 5 February 2026.
Trump wants the arrangements written into law. “So now we need Congress to expand these agreements and codify them into permanent law,” he said. He expects the rest of health care to follow: “If the drugs are coming down at numbers like we’re talking about, health care should be following, I think, very rapidly”.
Asked which mattered more to voters before the midterm elections, health care or petrol prices, he chose health care. “I would say health care is, to me, very important. You’re talking about life.”
