Pressure mounts on Europe as Trump deals push pharma to the US

Europe is under growing pressure to improve its market conditions for the pharmaceutical industry, as the Trump administration pushes drugmakers to invest in the United States. The administration has announced nine additional deals to lower drug prices, bringing the total to 26. These "most-favored-nation" agreements aim to compel companies to launch new medicines in the U.S. at prices similar to those in Europe while avoiding tariffs.

European patients may suffer the consequences if the U.S. continues signing such deals, as companies may avoid launching new drugs in Europe to maintain higher prices in the U.S., where they can generate larger profits. Europe's main tool to retain the industry is a proposed patent extension for biotech drugs, but industry experts argue it is too little too late.

Some say the patent extension and other industry incentives in the proposed Biotech Act are too late to stop the sector's shift to America, where market conditions are more favorable. The latest deals show a shift towards involving mid-sized pharmaceutical companies, with a mix of small specialist firms and large generic drugmakers.

The European Commission is monitoring the U.S. policy and its potential impact on the European market, but it remains too early to determine the effects. Some health care economists note a reduction in drug launch applications to the European Medicines Agency in the first quarter of 2026, with high prices persisting in the U.S. The EU and member countries are working together to maintain strict price controls, but industry experts emphasize that drug pricing is only part of the issue.

Europe faces a fragmented drug pricing model and a significant commercialization gap, with world-leading scientific innovation often leading to market launches outside the bloc. EU leaders stress the need for investments in market reforms to maintain patient access to innovative medicines.