BRUSSELS — The European Union should ready its Anti-Coercion Instrument, otherwise known as its “trade bazooka,” for use against Washington over its push to raise EU drug prices, Belgium’s deputy prime minister has said. Frank Vandenbroucke, who also serves as the country’s health minister, issued the call in a position paper published Thursday by the Egmont Institute think tank, co-authored with his deputy head of cabinet Gloria Ghéquière. He also said the EU should be ready to suspend the tariff concessions it granted to Washington under the Turnberry trade deal from August 2025 if the U.S. imposes additional duties on European goods.
The Trump administration has been pressuring European governments to pay more for medicines under its “most-favored-nation” policy as it seeks to bring American drug prices into line with those in other wealthy countries. Washington argues that Americans are unfairly shouldering the costs of pharmaceutical research and development, while Europeans reap the benefits. The MFN policy ties American drug prices to the lowest prices charged in a basket of wealthy countries, including France, Germany and Italy.
The U.S. has already concluded MFN pricing agreements with 26 pharma companies, which have agreed to benchmark the prices of drugs supplied to the U.S. The intended effect is for drugs manufacturers to either increase prices in third countries, to lower their U.S. prices, or both. Washington is also ramping up pressure on individual member countries to pay more for their drugs.
In June, the U.S. launched a so-called Section 301 investigation into Germany’s alleged “persistent underpayment” for innovative drugs. The investigation could lead to additional tariffs, exceeding the 15% ceiling agreed under Turnberry. Capitals are banding together to counter the U.S. pressure.
At an informal meeting in Dublin last week, ministers from Ireland, France, Germany, Italy, Denmark, Sweden, the Netherlands and Belgium discussed creating an EU-wide pharmaceutical task force to coordinate their response. In the paper, Vandenbroucke and his colleague argue that Brussels should open an ACI investigation in response to Washington’s drug pricing policy. The instrument allows the EU to impose tariffs and restrictions on services in response to foreign threats to trade if backed by a qualified majority of member countries.
The authors also highlight a clause in Pfizer’s MFN agreement requiring it to share additional revenue from higher prices outside the U.S. with the American government. The deputy PM questioned the underlying basis of the policy. Because the U.S. market is so lucrative compared to all the rest, drugmakers would accept withdrawing from third countries as long as it meant keeping U.S. prices high.
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