Pharmaceutical policy is no longer just about health economics, it's geopolitics. And few shits illustrate this better than the current U.S. trade and pricing agenda.

At the center of this shift as a policy paradox: in an effort to contain domestic healthcare costs, the U.S. is proposing to adopt international reference pricing, most notably via the Most Favored Nation (MFN) clause. This mechanism pegs U.S. prices to the lowest price found in comparable high-income countries.

Sounds logical? Not if you're trying to bring a new drug to Europe.

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The global impact of local pricing policy

Linking U.S. prices to lower European benchmarks fundamentally reshapes launch strategy. According to the CEO of a major European pharmaceutical company:

“We've already pulled two products from the EU pipeline. Not because of tariffs, but because low European prices would have forced us to reduce U.S. prices under the MFN clause.“

This is not an isolated case. The logic is sound:

• Lower prices in the EU > Lower benchmark for U.S. pricing > Reduced global profitability.

• Result: Companies delay, limit, or cancel European launches.

For a system like the EU's, which prides itself on fast access and broad reimbursement (especially in Germany), this could mean fewer innovative therapies entering the market at all, even post-EMA approval.

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Tariffs: A hidden cost driver

Overlay that with new U.S. import tariffs on European pharmaceutical goods, and you get a second shock to the system. Tariffs directly reduce profitability and push manufacturers to:

• Raise U.S. list prices (where possible),

• Re-shore production to the U.S. a 3-4 year investment with limited short-term capacity,

• Or withdraw certain products from transatlantic trade altogether.

Meanwhile, the EU is considering retaliatory tariffs, potentially affecting U.S.-made medicines exported to Europe. In either direction, the result is the same: higher drug costs, thinner margins, and declining incentives to launch globally.

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Three structural risks taking shape

1. Deprioritization of Europe as a launch market

   Companies increasingly treat Europe not as a strategic region, but as a risk factor due to price benchmarking exposure.

2. Delayed or withdrawn launches

   Even EMA-approved drugs may not reach patients if U.S. exposure is at stake.

3. Reduced R&D investment

   When access to key markets is uncertain or unprofitable, the ROI on innovation erodes.

As the interviewed CEO notes:

“In 15 years, we'll have a real problem. Research will dry up. Investors will go elsewhere“.

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What this means for Europe

Europe is facing the unintended consequences of someone else's pricing reform. Without ever touching a tariff or changing reimbursement laws, EU countries are indirectly pricing themselves out of innovation.

Unless strategies shift, Europe could see:

• Fewer first-in-class products entering the market,

• Longer launch timelines,

• Upward pressure on prices despite HTA-driven controls.

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Conclusion: When access becomes collateral damage

Efforts to make U.S. healthcare more affordable are having a ripple effect, limiting European patients access, straining global launch strategies, and squeezing the economic incentives that drive biopharma innovation.

In short: price transparency, tariffs, and geopolitics are colliding – at the cost of future access.