Pharma pushes for higher European drug prices, Trump or no Trump

It is questionable how effective MFN will be at reducing US drug prices. It is clear that it is having an impact on Europe. 2026 Bloomberg Finance Lp

US President Donald Trump’s plan to align US drug prices with those in peer countries is expected to have less impact than originally intended. That hasn’t stopped pharma companies from calling for higher prices and wider reforms in Europe, including Switzerland. An analysis.

Just over a year ago, US President Trump issued an executive orderExternal link calling for US drug prices to align with so-called Most-Favoured Nation (MFN) prices – those paid in other developed countries. On average, Americans pay three to four times as much for brand-name drugs as patients in other wealthy countries, research showsExternal link.

Pharma companies argued that if US prices dropped to levels in peer countries, it would wipe out budgets for research into new drugs.

The simple answer to this problem, Trump concluded, was for peer countries to raise prices and pay what he saw as their fair share of innovation. The US makes up less than 5% of the world population but accountsExternal link for at least half the revenue for most large pharmaceutical companies. The US National Institutes of Health is also the largest public funder of biomedical research in the world.

Companies and industry groups agreed with Trump and warned companies could delay or avoid launching products altogether in peer countries if prices don’t rise.

“If Switzerland serves as a benchmark for the US, medicines will only be offered in this country [Switzerland] at prices comparable to those in the US or will not be on the market at all, or with a massive delay,” wroteExternal link the Swiss pharmaceutical association Interpharma back in November 2025.

Switzerland and other MFN reference countries scrambled to respond. Governments faced a dilemma: raise prices amid surging healthcare costs or face worsening access to medicine.

Fast forward

In the last month though it’s become clear that MFN’s implementation includes a host of exceptions and conditions that limit its scope and impact.

Some 26 pharma companies have signed confidential MFN deals with the US government pledging to adopt drug prices in line with other countries in exchange for immunity from tariffs that could reach as high as 100%.

What we know now is that if companies participate in a voluntary pilot called GENEROUS for Medicaid, the federal insurance programme for low-income individuals, which already receives the lowest prices of US payers, they are exempt from a mandatory MFN pilot for Medicare called GLOBE.

According to rules announcedExternal link on September 30, only four unnamed companies are subject to GLOBE.

A Roche spokesperson confirmed by email that the company expects to be exempt from GLOBE and other pricing mandates as part of the agreement its California subsidiary Genentech signed with the US government in December 2025. This means they aren’t obliged to offer MFN prices for drugs sold to Medicare, which is the federal programme for seniors.

The GLOBE rules also exclude several major drug categories like cell and gene therapies. This drops the estimated savingsExternal link to $440 million (CHF366 million) through 2032 instead of the $11.9 billion originally expected last December.

How is MFN being implemented?

In May the White House projectedExternal link $529 billion in domestic savings over a decade through the MFN executive order. Under the voluntary MFN framework, manufacturers commit to launch new drugs across all markets in the US at prices comparable to those in other high‑income countries. They can also offer MFN prices in the Medicaid programme GENEROUS.

There are also two mandatory MFN programmes for Medicare – GLOBE (clinic-administered drugs) and GUARD (retail pharmacy drugs). If companies participate in GENEROUS, they appear to be exempt from the mandatory Medicare MFN programmes. GUARD rules have not been released yet.

Each federal pilot uses a slightly different set of reference countries. The MFN price in GENEROUS is defined as the second-lowest net price adjusted for GDP per capita using a purchasing-power-parity (PPP) for a group of eight countries – Canada, Denmark, France, Germany, Italy, Japan, Switzerland, and the UK.TrumpRxExternal link, launched in February 2026, offers discounted prices for some medicines direct to patients. However, it isn’t clear that these discounts are tied to specific international reference prices.

In addition, at least two heavily redacted MFN deals raise doubts that higher prices will fund research into new medicine. A provision in the deal with US firm Pfizer indicatesExternal link that the US Department of Health and Human Services is slated to receive some revenue from price increases overseas.

MFN also isn’t codified in any laws, and many of the MFN deals expire by 2030, raising questions about what happens when Trump’s term ends. The US pharma industry association PhRMA has already filed a lawsuitExternal link against the US government, arguing that GLOBE is unlawful and exceeds the government’s authority to impose nationwide price setting policies that Congress never authorised.

Although the MFN deals are confidential, companies claim that they are still obliged to align prices with peer countries for future drugs. However, there is no clarity on how this will be calculated and enforced, especially in the commercial insurance market which covers roughly 65% of the US population.

More than MFN

So, how worried should Switzerland, which is home to pharma giants Roche and Novartis, still be about MFN? Do prices in reference countries like Switzerland still matter?

“Even if MFN isn’t implemented fully in the US, it still has an impact on Switzerland,” Marcel Plattner, president of the Association of Pharmaceutical Companies in Switzerland (VIPS), told Swissinfo. “Companies can’t jeopardise their position in the US market in order to have a presence in Switzerland.”

A survey of Interpharma membersExternal link released in August found that, between January 2025 and June 2026, MFN concerns led companies not to submit seven of 22 new innovative medicines for Switzerland’s Specialties List, the list of medicines covered by compulsory insurance.

Whether MFN is implemented in its current form or another form may not matter. MFN has already done its job, by showing how much the world is dependent on high prices in the US.

“MFN may have achieved its ultimate objective by highlighting the issue of differential pricing between the US and Europe,” said Neil Grubert, an independent expert on market access who has been following MFN developments closely.

“It has concentrated minds in Europe on the issue and reinforced Trumps case that other countries have been free riding on the US for far too long.”

MFN has reignited a longstanding debate over whether Europe pays too little for innovative medicines, leaving the US to shoulder a disproportionate share of the cost of pharmaceutical innovation.

Pharmaceutical lobbies have now capitalised on Trump’s messages about free riding to argue that years of cost-cutting measures and drug pricing pressure have gone too far in Europe.

In an open letterExternal link published in late September, the chairs of nine European pharma companies including Novartis and Roche argued that Europe risked decline and dependency if it didn’t “rebalance decades of underinvestment in innovative medicines”. They point to a range of problems including low prices, weak intellectual property protection, and overregulation.

Roche announcedExternal link this week it is putting all future investment decisions on hold in Germany over the country’s healthcare cost-cutting policies.

As a small market with a huge pharmaceutical sector, Switzerland has a lot at stake. The pharmaceutical industry accounts for some 40% of exports, around 30% of which went to the US in 2025. The sector was responsible for 40% of economic growth over the past decade. Switzerland also prides itself on a top-notch healthcare system and rapid access to the latest therapies.

Swiss politicians appear to be heeding industry calls. A couple months ago health commissions in both chambers of the Swiss parliament suggestedExternal link holding off on volume-based discounts on high-priced medicine that had already been agreed by parliament in a cost containment package before Trump was re-elected.

They cited the new “international context” as a reason. The policy would have obliged companies to offer a rebate on any drug generating more than CHF15 million in annual sales. It’s now up to a new life sciences location working group formed by the Swiss government to determine the way forward.

Edited by Virginie Mangin/ds

Prefer Swissinfo on Google

See more Swissinfo articles in your Google results. Learn more

Close