Trump targets EU in drug pricing battle: Demands higher costs abroad, lower prices at home
President Donald Trump announced on Monday that he intends to force EU countries and other nations to pay higher prices for drugs produced by American pharmaceutical companies, while simultaneously compelling these companies to lower prices in the US. He stated that the EU is "nastier" than China, US "has all the cards" and that EU will agree to concessions.
What do you need to know?
- Donald Trump announced he will force EU countries to pay higher prices for American companies' drugs.
- The US President believes the EU is "nastier" than China.
- Trump has signed an executive order aimed at reducing drug prices in the US by up to 80 per cent.
What are Trump's plans regarding the EU?
During a press conference at the White House, Trump announced that he would instruct the Department of Commerce to initiate an investigation into the practices of foreign countries—primarily from the EU—that force pharmaceutical companies to offer very low prices, "unfairly" shifting the cost burden to American patients."
"The European Union has been brutal, brutal. And the drug companies actually told me stories. It was just brutal how they forced them," Trump said. - "We’re subsidising others’ healthcare, countries where they paid a small fraction for the same drug of what we pay many, many times more for, and we’ll no longer tolerate profiteering and price gouging from Big Pharma," he added.
Trump on the EU: They will have to pay more
Trump stated that the authorities of these nations "forced" pharmaceutical companies to slash drug prices, and the companies compensated by raising prices in the US, resulting in "American patients were effectively subsidizing socialist health care systems in Germany, in all parts of the European Union." The US President remarked that the Union is "nastier than China" when it comes to trade but has no "cards" and will have to agree to significant concessions in negotiations.
"They sell us 13 million cars; we sell them none. They sell us agricultural products; we sell them virtually nothing. They don’t take our products. That gives us all the cards (...) Europe’s going to have to pay a little bit more [while Americans will pay] a lot less," Trump said.
According to the executive order he signed, other elements of the president's plan to reduce drug prices include setting drug prices at the level of other developed countries through appropriate regulations, and increasing the import of medical supplies from abroad. According to the text, companies will have 30 days to make progress in lowering drug prices in the US, and if they do not, appropriate regulations will be implemented to achieve this.
Does Trump's idea have a chance of being realised?
Trump stated that this stance is against "most powerful lobby in the world, probably — the drug lobby," while his health secretary, Robert F. Kennedy Jr., said only Trump could undertake such actions because "he cannot be bought." According to the plan, these actions aim to reduce drug costs by up to 80 per cent. Currently, American prices are on average three times higher than those in other developed countries.
According to "The New York Times," the president’s decree could be blocked by the courts if Congress does not pass similar legislation. The initiative will face opposition from the pharmaceutical industry, which has so far justified higher prices by the need to fund research and development of new drugs.
