In a move set to escalate transatlantic trade tensions, U.S. President Trump announced over the weekend a plan to link drug prices to potential tariffs, targeting pharmaceutical companies and countries he believes are preventing lower prices in the United States. President Trump said he wants Americans to pay a “most favoured nation” (MFN) price for branded medicines – in his view, the lowest price charged in comparable countries in the Organisation for Economic Co-operation and Development (OECD).
Additionally, President Trump shared that the Centres for Medicare & Medicaid Services (CMS) will roll out an MFN model “soon” – linking this to possible tariffs or other trade moves against countries or companies he views as preventing lower US prices. Moreover, on Thursday (25 September), President Trump announced that he would impose a 100% tariff on any “branded or patented” drugs starting on 1 October unless a company is building pharmaceutical manufacturing plants in the US.
This follows his previous executive order, issued on 12 May, instructing the United States Department of Health and Human Services (HHS) to pursue MFN pricing, as well as the round of letters sent on 31 July by the White House to major manufacturers outlining expectations and timelines.
In response, the European Commission has shared that it will push for pharma and MedTech products to be exempt from US tariffs. When these tariffs will enter into force is still dependent on the results of Trump’s Section 232 tariff investigation. US President Trump has recently announced that these will come next week, on 1 October.
MEP Sokol (EPP/HR) spoke about the tariffs in a SANT Committee meeting on Wednesday, 24 September, stating: “We know that the US administration is putting strong pressure – I mean, they’re doing it openly, more or less – on the pharma industry to switch their production to the US.”
Mr. Sokol also hosted a private roundtable in the European Parliament, where participants discussed Europe’s pharmaceutical strategy, the balance between innovation and generics, and reducing overdependence in light of US tariffs. Joint procurement was debated, with both Commission-led and Member State-led models proposed.
Stockpiling was the most controversial issue, with calls for data-sharing and a mandatory redistribution mechanism to prevent larger states from hoarding medicines. It was discussed that a common EU system could support smaller countries.
Stakeholders cautioned against overemphasising contingency stocks and supported a coexistence of systems. Overall, there was broad support for EU-level solutions coordinated with Member States.
Conclusions
President Trump’s recent push for “most favoured nation” pricing and potential tariffs on the pharmaceutical industry has amplified transatlantic tensions, with the EU seeking to protect pharma and MedTech. Within the EU, debates continue over how to strengthen resilience – balancing innovation with generics, improving procurement models, and ensuring fair stockpiling rules that support smaller states.
