The US president’s Most Favoured Nation drug-pricing policy has triggered an earthquake across Europe as pharmaceutical giants scramble to protect their bottom lines.
SwissInfo
By Jessica Davis Plüss and Pauline Turuban
As the first anniversary of Donald Trump’s Most Favoured Nation (MFN) drug-pricing executive order approaches, the policy, which is aimed at cutting US healthcare costs, is no longer just a protectionist threat on paper. The order, which effectively forces pharmaceutical companies to charge US consumers the same as in other wealthy countries, has started to gain teeth.
Some 16 drug companies, including Swiss pharma giants Novartis and Roche (through its US subsidiary Genentech), have now signed confidential MFN deals with the US government exempting them from tariffs for three years according to some sources. As part of the deals, companies commit to align prices for new drugs with the lowest prices in a set of reference countries, which includes Switzerland. Some also agreed to boost investment in US research and manufacturing. In the past year, pharma companies have committed to invest in total more than $320 billion (CHF250 billion) in the US.
The Trump administration is also moving beyond voluntary deals to formalise MFN pricing via three models for state-run Medicaid and Medicare insurance schemes, with each using a slightly different set of reference countries. The launch of the prescription drug website TrumpRx.gov in February, which intends to deliver MFN prices directly to US consumers, has also raised the stakes. If companies don’t offer the lowest price, they risk being left off the high-profile platform.
In response, some companies have said they will delay or not launch new drugs at all in European countries, where historically prices have been far lower than in America, preferring to lose an entire market than set a low price that could gut their US revenue. Others have warned they will cut research and development spending in Europe unless governments raise the amount they are willing to pay.
High-stakes battle
Although there are still major uncertainties over how MFN will be implemented, Europe must take the policy seriously, experts say.
“MFN is here for the long-term”, said James Whitehouse, from UK-based consultants Lightning Health. “US politics are now dictating domestic health policy in other countries,” Whitehouse told Europe’s largest gathering of drug-pricing experts, the Evidence, Pricing and Access Congress in Amsterdam, in early March. This will have far-reaching implications for Europe, he told Swissinfo.
The US holds considerable sway over commercial decisions, accounting for at least half the revenue for most large pharmaceutical companies, partly due to high prices which, for branded products, can be four times higher than in other industrialised countries.
Lower prices in the US would significantly cut into revenue and profit, analysts at Swiss bank UBS wrote in a report published in May 2025. They estimated that major pharma firms could suffer an 8% hit to their net profit in 2028 based on the top 50 drugs sold through Medicare in 2024 and on ten new drugs expected to become top-selling drugs by the end of the decade.
Pharmaceutical companies and industry groups are now painting a dire picture of worsening access to medicine and less investment in Europe if drug prices in the region don’t rise to make up for lost revenue from the US.
US-based drug giant Pfizer, among the world’s top three pharma companies by sales, was the first to sign an MFN deal. Its chief executive, Albert Bourla, told the JPMorgan Chase healthcare conference in January that, if given a choice between reducing US prices to France’s level or stop supplying France, “we [will] stop supplying France”.
In contrast to the US where drug prices are largely based on market forces, European governments typically set prices through negotiation with companies. However, these have become more contentious, as companies argue prices aren’t adequately rewarding innovation. This is echoed by Trump who claims Europe is “freeloading” on innovation financed by US patients.
“Even before MFN was announced, the industry had been highly critical of the pricing environment in Europe, arguing it fails to recognise value,” said Neil Grubert, a UK-based global market access consultant. Europe has already seen its share of global R&D investment fall relative to the US and China. “Pressure is now also being exerted on European governments by President Trump.”
The stakes are particularly high for small, wealthy reference countries such as Switzerland and Denmark, whose economies depend heavily on the pharmaceutical sector but have less market leverage.
Last July Roche pulled its cancer drug Lunsumio from Switzerland’s list of reimbursed drugs after talks broke down with the federal public health office over the cost. Patients can still access the drug through a special charity programme, but the withdrawal avoided publishing the price for the drug that could have been used as a reference for the US.
US biotech firm Amgen, one of the companies that signed an MFN deal, recently withdrew its cholesterol-lowering drug Repatha from the Danish market, citing changed “global market dynamics” – although local media speculated the withdrawal was due to MFN pressure. Amgen lowered the drug’s price by 60% in the US in October 2025 to what it said was the lowest among economically developed (G7) countries.
“Some companies are saying the rational thing to do is to not launch an innovative drug in other countries until you have secured a US price to avoid pulling down the US price,” said Elisabeth Brock, a health economist and market access consultant based in Basel. “If you have no price, the US has nothing to compare to.”
Austerity bites
While Trump exerts pressure from across the Atlantic, European governments face domestic constraints that make price increases difficult. Many healthcare authorities, including those in Switzerland and Germany, are trying to rein in costs that have skyrocketed over the past decade.
Spending on medicine by Switzerland’s basic insurance hit a record CHF9.4 billion ($12 billion) in 2024, a 64% jump from 2014, driven by a handful of new, expensive treatments.
Some of these are true, life-changing innovations but not always. Studies have found that for some cancer drugs higher prices don’t necessarily correspond with more clinical benefit to patients.
This has led countries to demand greater justification for prices. Most European countries now require Health Technology Assessments to evaluate a drug’s cost-effectiveness. Some drugs, widely available in the US, have been rejected by some European price regulators because the assessments found the drug’s benefits didn’t justify their costs.
“Pharmaceutical companies say they need higher prices, but in Europe they need to prove that the drug is worth it,” said Brock. This price-setting approach also makes it difficult for European governments to raise prices with the flip of a switch, especially in the face of public pressure.
In November Interior Minister Elisabeth Baume-Schneider told Swiss public television SRF that “people in Switzerland cannot and should not have to pay with their health insurance premiums for prices in the US”.
The UK government last year agreed to pay 25% more for new medicine by 2035 as part of a trade deal with the US to avoid massive import tariffs. But pharma companies say it still isn’t enough to close the gap with US prices.
The European Union has other pressure points. It is implementing new pharmaceutical legislation, agreed last December, that aims, among other things, to improve access to medicine across the 27-member bloc. It requires a company to provide a drug in any member state that asks for it – or face immediate generic or biosimilar competition. It also means that companies could be forced to launch a drug in an MFN reference country if they launch anywhere else in the EU.
The MFN policy could also upend the decades-old strategy used by European governments of negotiating confidential discounts with drugmakers on their list prices, which Grubert says can be as much as 70% higher than the actual price paid, known as the net price. Switzerland recently codified confidential pricing models in law. The US regulations appear to call for net prices to be used as a reference rather than list prices.
“It’s in the interest of those countries to maintain confidentiality so that they can continue to secure what they believe to be among the most generous discounts and rebates,” said Grubert. “That was true before MFN but is an even more pressing issue now.” But it will be harder to keep net prices under wraps if the US demands them.
Ultimately, there is no guarantee that patients will be better off in the US or in Europe under MFN. If companies don’t launch in Europe, it would leave European patients without medicine and US patients bearing an even greater share of the cost of innovation. There’s also no mechanism in MFN to prevent companies from setting even higher prices in the US to compensate for revenue lost in Europe.
If European governments raise prices, it could put health systems, many of which are funded largely by public sources, under greater strain, potentially reducing budget for other services. Patients are likely to pick up the bill with higher out-of-pocket payments.
Many people will no longer be able to afford treatment, wrote Toma Mikalauskaite, policy head at the European Cancer League, in an email. “At a time when patients already face delays and medicine shortages, increasing drug prices would leave some cancer patients without the care they urgently need,” she said.
SwissInfo
swissinfo is an enterprise of the Swiss Broadcasting Corporation (SBC). Its role is to inform Swiss living abroad about events in their homeland and to raise awareness of Switzerland in other countries. swissinfo achieves this through its nine-language internet news and information platform.
By Jessica Davis Plüss and Pauline Turuban
As the first anniversary of Donald Trump’s Most Favoured Nation (MFN) drug-pricing executive order approaches, the policy, which is aimed at cutting US healthcare costs, is no longer just a protectionist threat on paper. The order, which effectively forces pharmaceutical companies to charge US consumers the same as in other wealthy countries, has started to gain teeth.
Some 16 drug companies, including Swiss pharma giants Novartis and Roche (through its US subsidiary Genentech), have now signed confidential MFN deals with the US government exempting them from tariffs for three years according to some sources. As part of the deals, companies commit to align prices for new drugs with the lowest prices in a set of reference countries, which includes Switzerland. Some also agreed to boost investment in US research and manufacturing. In the past year, pharma companies have committed to invest in total more than $320 billion (CHF250 billion) in the US.
The Trump administration is also moving beyond voluntary deals to formalise MFN pricing via three models for state-run Medicaid and Medicare insurance schemes, with each using a slightly different set of reference countries. The launch of the prescription drug website TrumpRx.gov in February, which intends to deliver MFN prices directly to US consumers, has also raised the stakes. If companies don’t offer the lowest price, they risk being left off the high-profile platform.
In response, some companies have said they will delay or not launch new drugs at all in European countries, where historically prices have been far lower than in America, preferring to lose an entire market than set a low price that could gut their US revenue. Others have warned they will cut research and development spending in Europe unless governments raise the amount they are willing to pay.
High-stakes battle
Although there are still major uncertainties over how MFN will be implemented, Europe must take the policy seriously, experts say.
“MFN is here for the long-term”, said James Whitehouse, from UK-based consultants Lightning Health. “US politics are now dictating domestic health policy in other countries,” Whitehouse told Europe’s largest gathering of drug-pricing experts, the Evidence, Pricing and Access Congress in Amsterdam, in early March. This will have far-reaching implications for Europe, he told Swissinfo.
The US holds considerable sway over commercial decisions, accounting for at least half the revenue for most large pharmaceutical companies, partly due to high prices which, for branded products, can be four times higher than in other industrialised countries.
Lower prices in the US would significantly cut into revenue and profit, analysts at Swiss bank UBS wrote in a report published in May 2025. They estimated that major pharma firms could suffer an 8% hit to their net profit in 2028 based on the top 50 drugs sold through Medicare in 2024 and on ten new drugs expected to become top-selling drugs by the end of the decade.
Pharmaceutical companies and industry groups are now painting a dire picture of worsening access to medicine and less investment in Europe if drug prices in the region don’t rise to make up for lost revenue from the US.
US-based drug giant Pfizer, among the world’s top three pharma companies by sales, was the first to sign an MFN deal. Its chief executive, Albert Bourla, told the JPMorgan Chase healthcare conference in January that, if given a choice between reducing US prices to France’s level or stop supplying France, “we [will] stop supplying France”.
In contrast to the US where drug prices are largely based on market forces, European governments typically set prices through negotiation with companies. However, these have become more contentious, as companies argue prices aren’t adequately rewarding innovation. This is echoed by Trump who claims Europe is “freeloading” on innovation financed by US patients.
“Even before MFN was announced, the industry had been highly critical of the pricing environment in Europe, arguing it fails to recognise value,” said Neil Grubert, a UK-based global market access consultant. Europe has already seen its share of global R&D investment fall relative to the US and China. “Pressure is now also being exerted on European governments by President Trump.”
The stakes are particularly high for small, wealthy reference countries such as Switzerland and Denmark, whose economies depend heavily on the pharmaceutical sector but have less market leverage.
Last July Roche pulled its cancer drug Lunsumio from Switzerland’s list of reimbursed drugs after talks broke down with the federal public health office over the cost. Patients can still access the drug through a special charity programme, but the withdrawal avoided publishing the price for the drug that could have been used as a reference for the US.
US biotech firm Amgen, one of the companies that signed an MFN deal, recently withdrew its cholesterol-lowering drug Repatha from the Danish market, citing changed “global market dynamics” – although local media speculated the withdrawal was due to MFN pressure. Amgen lowered the drug’s price by 60% in the US in October 2025 to what it said was the lowest among economically developed (G7) countries.
“Some companies are saying the rational thing to do is to not launch an innovative drug in other countries until you have secured a US price to avoid pulling down the US price,” said Elisabeth Brock, a health economist and market access consultant based in Basel. “If you have no price, the US has nothing to compare to.”
Austerity bites
While Trump exerts pressure from across the Atlantic, European governments face domestic constraints that make price increases difficult. Many healthcare authorities, including those in Switzerland and Germany, are trying to rein in costs that have skyrocketed over the past decade.
Spending on medicine by Switzerland’s basic insurance hit a record CHF9.4 billion ($12 billion) in 2024, a 64% jump from 2014, driven by a handful of new, expensive treatments.
Some of these are true, life-changing innovations but not always. Studies have found that for some cancer drugs higher prices don’t necessarily correspond with more clinical benefit to patients.
This has led countries to demand greater justification for prices. Most European countries now require Health Technology Assessments to evaluate a drug’s cost-effectiveness. Some drugs, widely available in the US, have been rejected by some European price regulators because the assessments found the drug’s benefits didn’t justify their costs.
“Pharmaceutical companies say they need higher prices, but in Europe they need to prove that the drug is worth it,” said Brock. This price-setting approach also makes it difficult for European governments to raise prices with the flip of a switch, especially in the face of public pressure.
In November Interior Minister Elisabeth Baume-Schneider told Swiss public television SRF that “people in Switzerland cannot and should not have to pay with their health insurance premiums for prices in the US”.
The UK government last year agreed to pay 25% more for new medicine by 2035 as part of a trade deal with the US to avoid massive import tariffs. But pharma companies say it still isn’t enough to close the gap with US prices.
The European Union has other pressure points. It is implementing new pharmaceutical legislation, agreed last December, that aims, among other things, to improve access to medicine across the 27-member bloc. It requires a company to provide a drug in any member state that asks for it – or face immediate generic or biosimilar competition. It also means that companies could be forced to launch a drug in an MFN reference country if they launch anywhere else in the EU.
The MFN policy could also upend the decades-old strategy used by European governments of negotiating confidential discounts with drugmakers on their list prices, which Grubert says can be as much as 70% higher than the actual price paid, known as the net price. Switzerland recently codified confidential pricing models in law. The US regulations appear to call for net prices to be used as a reference rather than list prices.
“It’s in the interest of those countries to maintain confidentiality so that they can continue to secure what they believe to be among the most generous discounts and rebates,” said Grubert. “That was true before MFN but is an even more pressing issue now.” But it will be harder to keep net prices under wraps if the US demands them.
Ultimately, there is no guarantee that patients will be better off in the US or in Europe under MFN. If companies don’t launch in Europe, it would leave European patients without medicine and US patients bearing an even greater share of the cost of innovation. There’s also no mechanism in MFN to prevent companies from setting even higher prices in the US to compensate for revenue lost in Europe.
If European governments raise prices, it could put health systems, many of which are funded largely by public sources, under greater strain, potentially reducing budget for other services. Patients are likely to pick up the bill with higher out-of-pocket payments.
Many people will no longer be able to afford treatment, wrote Toma Mikalauskaite, policy head at the European Cancer League, in an email. “At a time when patients already face delays and medicine shortages, increasing drug prices would leave some cancer patients without the care they urgently need,” she said.
SwissInfo
swissinfo is an enterprise of the Swiss Broadcasting Corporation (SBC). Its role is to inform Swiss living abroad about events in their homeland and to raise awareness of Switzerland in other countries. swissinfo achieves this through its nine-language internet news and information platform.
