Playing both sides of trade war, pharma companies are asking for certain compensations for scientific innovation and a smoother regulatory framework.
With U.S. President Donald Trump doubling down on plans to issue pharma-specific tariffs, the industry is now demanding that the European Union implement certain measures to help them maintain their presence in the region, according to media reports on Tuesday.
Some 30 pharma companies, including European companies like AstraZeneca and American companies like Pfizer, wrote to European Commission President Ursula von der Leyen, saying that the industry suffers certain cost disadvantages in Europe compared to in the U.S., according to reporting from Reuters, which cited French publication Les Echos.
Among the industry’s demands of von der Leyen are certain compensations to recoup the cost of scientific innovation, and a simpler regulatory framework for their drugs, according to Reuters. The companies also bristled at an upcoming fee associated with wastewater treatment.
“We hope to work together in the coming weeks to ensure that these proposals become reality to the benefit of Europe’s patients and economic development,” the companies wrote in the letter, Reuters reported.
Drugs are sold at a higher price on average in the U.S., something that American politicians have long criticized. During the Biden administration, lawmakers used this disparity to blast pharma companies and ask them to lower their prices. Trump has also slammed the difference in drug pricing, signing the so-called Most Favored Nation executive order in 2020 to attempt to bring the prices Medicare pays for drugs down to the same level as other countries. That executive order was never enforced due to legal action from pharmaceutical companies and was eventually rescinded by the Biden administration.
The industry’s EU demands come as Trump’s sector-specific tariffs inch closer to being realized. Last week, Trump announced that “major” tariffs on pharma are coming “very shortly.” Over the weekend, Commerce Secretary Howard Lutnick confirmed that the tariffs are on and will likely hit “in the next month or two.”
The Commerce Department earlier this week also opened a Section 232 probe on pharma imports into the U.S., which could further empower Trump to impose tariffs on the industry.
In the face of these tariffs, pharma companies last week warned the EU that it could face an “exodus” of drugmakers to the U.S. According to European Federation of Pharmaceutical Industries and Associations, the EU could lose as much as 85% of capital investments from the industry and up to 50% of R&D expenditure. From 2025 to 2029, this could mean a potential of €164.8 billion in investments lost.
“The US now leads Europe on every investor metric from availability of capital, intellectual property, speed of approval to rewards for innovation,” the Federation warned, noting that in the current uncertain market environment, pharma has “little incentive” to invest in the EU and “significant drivers to relocate” to the U.S.
