Europe fears that a new US policy aimed at lowering medicine prices for Americans could ultimately drive up costs for European healthcare systems and affect access to medicines. Brussels will now assess whether the move could delay drug launches, raise prices or push pharmaceutical investment out of the EU.
EU health ministers have asked the European Commission to analyse how the United States’ “most favoured nation” (MFN) drug-pricing policy could hit European health systems and budgets. They handed the task to Health Commissioner Olivér Várhelyi over lunch on Tuesday.
The concern is that US efforts to reduce medicine prices could shift financial pressure onto other markets. President Donald Trump’s “most favoured nation” policy seeks to tie US drug prices to the lowest level paid by other wealthy countries, so that Americans stop paying far more than patients elsewhere. The flip side, and the part that alarms Europe, is pressure on those countries to pay more, so that drugmakers can recoup at home the revenue they would lose in the United States.
We want to be quick, meaning I still want to do it before the summer. — Olivér Várhelyi, Commissioner for Health and Animal Welfare
The Commission has “an assignment, which we are happy to deliver on”, Commissioner Várhelyi told reporters after the Employment, Social Policy, Health and Consumer Affairs (EPSCO) Council: a “very basic analysis” of the MFN policy’s key features and its “potential impact on the European healthcare systems and budgets”. Work would begin “rather rapidly,” he said.
Negotiate as one
The analysis will look at which medicines could be affected and whether the policy risks delaying new product launches in the EU or triggering market withdrawals. It will also map how MFN works, including whether it pushes pharmaceutical manufacturing or innovation out of Europe. On timing, Mr Várhelyi was unambiguous: “We want to be quick, meaning I still want to do it before the summer.”
Not everyone is convinced that Europe would become less valuable to pharmaceutical companies under such pressure, however. NCAPR, the network of national authorities that handle medicine pricing and reimbursement across the EU, pushed back in an April paper. It named the US policy directly and argued that Europe, a large market with near-universal health coverage, remains attractive to drugmakers.
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The paper undercuts the idea that the bloc must pay more to keep companies and their medicines. The prospect has opened a wider debate about whether Europe should negotiate as one.
A response to the Beneluxa call
The assignment is the clearest institutional response yet. On 10 June, the five Beneluxa countries, Belgium, the Netherlands, Luxembourg, Austria and Ireland, issued a joint statement urging Europe to act as one on the pricing and reimbursement of new medicines, and warning against uncoordinated national responses. The group, which has run joint drug-pricing work since 2015, for the first time explicitly called for extending cooperation into pricing and reimbursement, which remain national competences.
The call moved up to Council level at Tuesday’s closed-door lunch on pharmaceutical resilience and strategic autonomy. Belgian Deputy Prime Minister and Health Minister Frank Vandenbroucke, whose country co-founded Beneluxa, had set out the agenda on arrival. He called the pressure on Europe’s pharmaceutical system “serious and even threatening”. Member states should share information on prices, shortages and market withdrawals, he argued, then coordinate their national pricing policies, with the Commission playing “a proactive role”.
Cypriot Health Minister Neophytos Charalambides, who chaired the Council, said ministers had agreed on “the importance of closer EU coordination to strengthen pharmaceutical resilience”. Solidarity and information-sharing, he added, were “what was heard” around the table. The presidency will gather the discussion into a note for the incoming Irish presidency.
Commissioner Várhelyi was careful to mark the limits of the Commission’s role. Financing healthcare, he stressed, is “exclusive national competence”, and Brussels was “not trying to get involved”. But he offered support where it could help, pointing to the first assessment published under the EU’s new Health Technology Assessment rules. More consistent use of that tool, he suggested, could speed patients’ access to new medicines.
The SPC: “Two parts of the equation”
The Commissioner also used the press conference to answer member states, among them Malta, Italy, Poland and Estonia, that have warned against the most contested part of the Biotech Act regulation. That measure would extend supplementary protection certificates (SPCs) by a year, lengthening patent protection on certain biotech medicines.
Critics say it would delay cheaper biosimilars and raise costs. Malta had been the bluntest in the earlier debate, calling itself “reluctant to direct taxpayer money into an industry which refuses to supply small markets or that expects us to pay substantially higher prices than large member states”.
If we don’t do it, we won’t have that therapy. This is a much bigger risk. — Olivér Várhelyi, Commissioner for Health and Animal Welfare
Mr Várhelyi framed his defence around “two parts of the equation”. On cost, he argued that prevention could ease the strain on health budgets from an ageing population and a projected doubling of chronic disease. Care now absorbs around 80 per cent of health budgets against just 3–6 per cent for prevention, he said, yet “with every euro spent on prevention you can save four, four and a half euros in care”. His conclusion: “I’m not that worried about the funding.”
The other part, he said, was access: the latest therapies will reach Europe’s patients only if companies manufacture them on the continent. The SPC, he argued, is a long-term incentive to anchor innovation, clinical trials and manufacturing in Europe. He stressed that it is deliberately narrow, covering only biotech inventions “innovated, clinically tested and manufactured in Europe,” with “strong economic and political conditionalities attached”.
He put the cost at “70 million euros per product per year” but called that beside the point. “If we don’t do it, we won’t have that therapy. This is a much bigger risk,” he said, especially for rare diseases and cancer, where most of the affected products originate.
The rest of the agenda
The pricing discussion ran alongside the Council’s formal business. Ministers agreed their negotiating position on the European Biotech Act I directive, which updates the rules on genetically modified micro-organisms (GMMs) and the processing of organs. It is the first legislative deliverable of the Commission’s December health package. Ministers also debated the accompanying regulation, setting out national priorities for strengthening the EU’s biotechnology and biomanufacturing sectors.
The Cyprus presidency presented a progress report on a separate proposal to simplify the rules for medical and in vitro diagnostic devices, which aims to cut red tape and ease shortages of certain devices. Under “other business”, ministers also received updates on the recent Ebola Bundibugyo virus outbreak in Central Africa, the Critical Medicines Act, the urban waste water treatment directive, the pandemic agreement, the presidency’s health conferences, and the incoming Irish presidency’s work programme.
Over to Dublin
The unfinished business now passes to Ireland, which takes over the presidency on 1 July. Its health minister has signalled urgency on the Biotech Act, and Dublin will open negotiations with the less contentious clinical-trials chapter first. Mr Várhelyi’s MFN analysis, promised before the summer, will land on the same desk.
