US pharma price probe raises threat of new drug tariffs
Trump administration plans trade assault in attempt to drive down cost of medicines including weight-loss pills
Donald Trump’s administration is stepping up attacks on US trading partners over drug pricing, preparing a new probe that would lay the ground for a fresh barrage of tariffs.
The imminent investigation, which would come under Section 301 of the Trade Act of 1974, would consider whether any US trading partners are underpaying for drugs, said three people familiar with the matter.
Trump has repeatedly complained other countries pay less than the US for medicines and signalled he would take trade actions against nations that refused to “equalise”.
“In London, you’d buy a certain drug for $130 . . . and in New York, you pay $1,300 for the same thing,” Trump said last week, referring to weight-loss pills.
US drug prices are on average almost three times higher than those in many other developed countries, according to research by The Rand Corporation.
Ozempic, the popular weight-loss drug from Denmark’s Novo Nordisk, costs $936 for a one-month supply in the US, but only $147 for the same amount in neighbouring Canada and as little as $83 in France, according to data from KFF, a non-profit health group.
The new US investigation could lead to tariffs on any products or goods the White House chooses and will reignite global trade tensions that had calmed for most trading partners after Trump walked back some threatened duties and struck deals with countries.
It also marks another twist in Trump’s volatile trade policy, which has taken the US into a months-long trade war with China and involved steep new tariffs on allies in Europe, North America and Asia.
The probe is the latest in a broader campaign by the president to lower drug prices for American consumers. Earlier this year, he demanded pharmaceutical companies offer the US their best global price for drugs or face unspecified repercussions.
Pfizer and AstraZeneca have both announced recent deals with the Trump administration to lower the prices of some of their products.
Novo Nordisk and Eli Lilly have both indicated they have held discussions with the White House over pricing.
But Trump has also rattled the pharmaceutical industry by threatening to apply steep tariffs to imports of branded and generic drugs as part of a national security investigation.
As part of his deal with the EU struck earlier this year, Trump agreed pharmaceuticals imports into the US would be subject only to a 15 per cent tariff, despite his national security investigation.
In an earlier deal with the UK, the US agreed to continue talks around the duty added to British drugs entering the US. British negotiators have held meetings in Washington in recent weeks to try to secure a lower tariff in exchange for London paying drug companies billions of pounds more for medicines.
Last month, Trump escalated his threats and announced he would hit imports of branded drugs with tariffs of 100 per cent unless companies began building manufacturing capacity in the US.
But those particular tariffs have failed to materialise, and US officials have said companies will be given time to demonstrate they are investing in the country and lowering prices.
The White House did not respond to a request for comment.