Renegotiating Pharmaceutical Prices
Major pharmaceutical companies like Novartis and Roche are pressuring European governments to increase medication prices, leveraging Trump's tariff threats as negotiating leverage.
CEOs argue that Europe's regulated, lower-priced pharmaceutical market is hindering innovation and investment, while praising the more profitable US market. These companies have announced massive investments in the US ($23 billionfrom Novartis and $50 billion from Roche over five years) while simultaneously demanding higher prices in Europe.
This coordinated lobbying strategy appears designed to reshape global pharmaceutical pricing: by raising European prices, companies could both increase profits and potentially undermine arguments for US price controls, thereby preserving their most lucrative market.
Forecast Scenarios (GCHQ)
Higher European Pharmaceutical Prices: Likely (55-75%)
European governments will partially concede to pharmaceutical industry demands for higher prices on innovative medicines within 6-12 months, particularly for specialty and breakthrough therapies. However, increases will be modest compared to US prices, as European health systems balance innovation support against budget constraints. Key driver: The credible threat of investment relocation combined with the strategic importance of the pharmaceutical sector to European economies.
Major US Pharmaceutical Tariff Implementation: Realistic Possibility (45-55%)
The US will implement significant pharmaceutical tariffs, but likely at a lower rate or phased-in schedule than initially threatened. Drug companies are actively lobbying for phased implementation "to reduce the sting from the charges and to allow time to shift manufacturing." The balanced probability reflects conflicting pressures: Trump's commitment to manufacturing repatriation versus pharmaceutical industry warnings about price increases and innovation impacts.
US Drug Price Controls: Highly Unlikely (15-30%)
Despite some discussions, the Trump administration considering linking US medicine prices to lower amounts paid by other developed countries, full implementation of European-style price controls in the US remains highly unlikely in the next 12 months. Historical resistance from the industry, complexity of implementation, and Republican opposition to price controls make this scenario improbable.
