US tariffs and MFN pricing threaten pharma investment and access in Europe
Rising uncertainty driven by US tariffs and proposed “most-favoured nation” pricing is prompting pharmaceutical companies to delay investment and product launches in Europe
US tariffs and pricing pressure are causing uncertainty for the pharma sector, which will slow investment decisions and delay patient access to new medicines in Europe, according to a new industry survey conducted for the European Confederation of Pharmaceutical Entrepreneurs (EUCOPE).
The survey, carried out by Copenhagen Economics roughly estimates that its members added €98 billion to the EU’s GDP in 2024 and supported around 678,000 jobs when direct (€59B, 225k jobs), indirect (€24B, 276k jobs) and induced effects (€16B, 177k jobs) were taken into account.
The study underscores how the sector remains one of Europe’s most productive, with high productivity driven by substantial investment in research and specialized skills. However, 57% of respondents expect R&D expenditure to decline, and none expected an increase in these uncertain times.
The two main drags on investment are the US imposition of 15% tariffs on non-generic medicines and what the Trump administration refers to as “most-favoured nation” (MFN) pricing. The survey responses suggest these policies may prompt companies to reconsider investment and launch strategies, potentially shifting activities away from the EU27.
Catherine Feore
Uncertainties prevail
Several companies said it was difficult to devise a clear response strategy and were therefore adopting a “wait-and-see” approach, waiting for initial reactions from their larger counterparts.
It is still unclear how MFN pricing will be implemented, some of the bigger players targeted by Trump have chosen to reach voluntary agreements with the US administration. Given the choice of foregoing revenue and profits in the US market, companies replied that in the short and long run they were likely to withdraw from or delay launches in selected EU27 countries. Worryingly, this figure rises from 64% in the short run and 82% in the long run.
Catherine Feore
US is best
The tariffs do not appear to discourage EUCOPE’s members from prioritizing the US market. 91% of respondents state that delaying or foregoing product launches in the US is unlikely in the short run, underscoring that the US market is still more attractive.
Catherine Feore
Absorbing tariffs
On tariffs, most responses indicate that their consequences are unlikely to be directly felt in the US and are more likely to affect other markets. Only around 1 in 10 companies believe they are likely to pass on some, or the entirety of the tariff cost to US customers. 43% of the companies state that they are unlikely to simply absorb tariff costs and accept a lower profit margin, indicating possible cost-cutting or selective price increases elsewhere. 71% say that, in the long run, they won’t pass on these costs, implying that price adjustments, supply-chain redesign, and strategic changes may be made.
As US tariffs and MFN pricing distort global incentives, Europe risks becoming the pressure valve rather than a priority destination for innovation. Unless policymakers find a way to circumvent the impact of decisions taken elsewhere, Europe could see a gradual erosion of its life-sciences base.