US saves money, global payments? Industry Research Warns: Trump's Lowering Drug Prices Will “Incentivize” Pharmaceutical Companies to Increase Overseas Prices

The Zhitong Finance App learned that a study found that the Trump administration's push to reduce US drug spending instead constituted a strong incentive for pharmaceutical companies to raise drug prices and reduce drug accessibility in other parts of the world.

The president hopes that the prices of drugs in the US Medicare (Medicare) federal health insurance plan will be in line with drug prices in other wealthy countries. However, the researchers found that for about three-quarters of the drugs they studied, if the company charged Medicare a lower price, it would lose more revenue in the US than the entire sales of the drug in countries with lower drug prices used as a reference for the new benchmark.

According to the study published in “The Lancet” on Sunday, the results suggest that drug makers may raise prices in some countries or simply withdraw from relevant markets.

Pharmaceutical companies have reached a series of agreements with the White House, and some companies are also seeking to use the US policy as leverage to raise prices elsewhere. For example, Astellas Pharmaceuticals said that due to concerns about Trump's pricing policy, the company secured a higher price for a new ophthalmic drug in Japan this year.

In Europe, some companies are scaling back their plans. Baijian CEO Chris Weibach said this year that the company will launch its new post-natal depression drug Zurzuvae in only a few European countries; while Roche Holdings said it may never launch an unapproved breast cancer pill in its home market, Switzerland.

In the study, researchers from Brigham and Women's Hospital analyzed 195 patented drugs that accounted for $87.9 billion in Medicare spending in 2024. They estimated how much the program would actually pay for these drugs after factoring in confidential rebates and discounts, and compared it to 19 reference countries.

The research team found that if Medicare prices were lowered to the same level, the US government would save $11.6 billion on two pilot projects to test the policy. But if 17 companies with separate pricing agreements with the White House were exempted, that figure would shrink to $3.3 billion.

Earlier this month, nine more pharmaceutical companies reached pricing agreements with the government, but these agreements were not included in this analysis.