LONDON: European governments are scrambling to understand the impact of a new executive order from U.S. President Donald Trump, which seeks to pressure other countries into paying more for prescription drugs. The directive has sent shockwaves through the global pharmaceutical industry and raised concerns about trade tensions and drug affordability across the continent.
Trump’s order, issued Monday, aims to reduce the significant price disparity between what Americans pay for medicines and what other developed nations—especially in Europe—pay. In some cases, European countries pay only one-third of U.S. drug prices. Trump said the U.S. would leverage trade policy to close that gap, even hinting at potential tariffs if pharmaceutical companies do not lower domestic prices.
Governments across Europe, where public healthcare systems negotiate directly with drug manufacturers to keep prices low, are now assessing how Trump’s directive might affect them. Danish Industry and Business Minister Morten Bodskov said he plans to meet with domestic drugmakers to evaluate the implications. “The uncertainty caused by the U.S. is bad for the world,” he told Reuters, though he reaffirmed support for Denmark’s globally recognised pharmaceutical sector, including Novo Nordisk, whose blockbuster drugs Ozempic and Wegovy were specifically mentioned by Trump.
Novo Nordisk, currently valued at nearly €265 billion, said it welcomed the chance to discuss the issue further. The European Commission also responded, stating it would evaluate the executive order’s potential impact. A spokesperson acknowledged the broader challenges facing the pharmaceutical industry on both sides of the Atlantic and noted that Commission President Ursula von der Leyen recently met with pharma executives over concerns about possible U.S. tariffs.
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Trump’s move resurrects a similar effort from his first term, which was previously blocked in court. This time, the strategy may include using national security grounds to justify tariffs on pharmaceutical imports—a tactic seen in previous trade battles. “The United States will no longer subsidise the healthcare of foreign countries,” Trump declared. “I'm not blaming drug companies, I'm blaming the countries.” Despite higher U.S. prices, American patients often benefit from quicker access to new treatments. A recent study in the British Medical Journal found the U.S. launched 55 per cent more cancer drugs than the UK over the past 30 years. AstraZeneca, a major European pharmaceutical player, said it supports fairer global cost-sharing but warned against reforms that might “disrupt patient care, undermine U.S. biotech leadership, or stifle innovation.”
Health economists and legal experts remain doubtful about the enforceability of Trump’s executive order. For it to work, the administration would need access to confidential pricing agreements between drugmakers and national health systems, something governments are unlikely to provide. Daniel Howdon, a health economist at the University of Leeds, noted that without a significant overhaul of UK laws or policies, Trump’s efforts won’t succeed. Germany’s health ministry echoed this, pointing out its structured system for price negotiations. Some analysts, like UBS’s Trung Huynh, warned that even with tariff threats, ageing populations and stretched healthcare budgets make it unlikely that European governments will agree to higher drug prices.
A source in the UK’s Department of Health and Social Care confirmed that some NHS drug prices are as low as one-quarter of U.S. prices. The department declined to comment officially. Still, some in the industry believe Trump’s approach may serve as a negotiation tactic. “He’s showing pharma all the tools he has and making a credible threat,” said Anna Kaltenboeck, a health economist at Verdant Research. As Trump’s order reverberates through Europe, governments are left weighing the economic and political risks of a transatlantic pharmaceutical showdown.
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