US Pharma Pressure Pushes European Governments to Raise Drug Prices
US drug price pressure is forcing pharmaceutical companies to demand higher costs from European nations, threatening price hikes that could eventually impact global markets, including Israel.
US pressure on drug prices, driven by Medicare negotiations and TrumpRx initiatives, is squeezing pharma profits and forcing companies to pressure European governments for higher procurement costs.
According to a Coface report, patented drug prices in the US are four times higher than in Europe, while the US leads OECD spending on prescription drugs at 1.6% of GDP. In response to American pressure, European nations are adopting divergent strategies. The UK agreed to raise net prices for new drugs by 25% to secure innovation status, whereas Germany increased mandatory manufacturer rebates from 7% to 15.5% to save 4.1 billion euros. France is balancing high launch prices for breakthrough drugs with subsequent steep discounts to save 3 billion euros.
Europe's ability to absorb price hikes is constrained by heavy deficits and an aging population, prompting pharmaceutical giants to redirect billions in investments to the US, while China expands its share in global clinical trials.
Michael Nachmanovitch, CEO of Coface Israel, noted that the local market currently benefits from restrained prices tied to European benchmarks and HMO bargaining power. However, any shift in European pricing trends could eventually impact Israeli consumers, posing a long-term challenge for healthcare accessibility.
