Europe is facing increasing pressure to create a more favorable market for the life sciences sector as the Trump administration continues its push for drugmakers to invest in the U.S. Washington announced nine more deals with pharmaceutical companies to lower certain drug prices on Monday evening, bringing to 26 the total number of agreements. These so-called most-favored-nation deals aim to compel companies to launch new medicines in the United States at prices similar to those in Europe, while avoiding some tariffs.
They also commit firms to invest in new facilities in America, with at least $19.6 billion pledged so far, the White House said. Industry leaders in Europe warn that if the U.S. continues to sign more deals with companies — designed to drive down prices for American citizens while boosting U.S. investments — European patients will feel the effects. Since the most-favored nation policy will see Washington copy some EU countries’ prices, companies are opting not to launch new drugs in Europe to maintain higher prices in the U.S. where they can make bigger profits.
In addition, companies are increasingly choosing America for research and manufacturing. Two large generics firms that also make branded drugs were included in the nine new deals. Meanwhile, Europe’s current biggest offering to entice industry to stay local — a proposed patent extension for certain biotech drugs — is too little too late, some argue.
Industry says the patent extension comes with too many conditions and it won’t come into effect in time to stop the sector from pivoting more to America where market conditions are more favorable. The patent extension and other industry perks in the proposed Biotech Act are a step in the right direction, said Alexander Natz, secretary general of the European Confederation of Pharmaceutical Entrepreneurs. But “it’s probably too late if we wait for the Biotech Act” to take effect, likely in a couple of years, he said.
The latest deals mark a shift away from the previous 17 deals with multi-billion dollar big pharmaceutical companies and include a mix from small specialist firms with only a handful of licensed drugs to vast generic drugmakers. The new agreements show that the most-favored-nation policy “has entered a new phase, now explicitly involving mid-sized pharmaceutical companies,” Natz said. EUCOPE represents small and mid-sized biotech and pharma companies.
The deals link drug pricing with trade and manufacturing commitments, he said. They potentially affect patient access, launch and investment decisions, and ultimately where innovation and manufacturing take place,” Natz said. Nonetheless, the European Commission controls many of the market conditions for the sector, from patent durations to clinical trials regulations and marketing authorizations.
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