The Belgian Deputy Prime Minister has urged the European Union to prepare its trade coercion tool, known as the trade 'Big Stick', to counter U.S. pressures regarding the rising prices of European medicines.
Washington's Pharmaceutical Threats
Frank Vandenbroucke, who also serves as the country's Minister of Health, made this request in an official article published on Thursday by the Agment think tank. He co-authored the article with his deputy, Gloria Gekir.
Vandenbroucke also stated that the European Union should be prepared to suspend tariff concessions granted to Washington under the Trade and Technology Agreement starting in August 2025 if the United States imposes additional tariffs on European goods.
U.S. Pressures on European Countries
The Trump administration has pressured European countries to pay more for medicines, under the 'Most Favored Nation' (MFN) policy, which seeks to align U.S. drug prices with those of other wealthy countries. Washington claims that Americans unfairly bear the costs of pharmaceutical research and development, while Europeans benefit from it.
The MFN policy ties U.S. drug prices to the lowest prices set in a basket of wealthy countries, including France, Germany, and Italy. The United States has signed MFN pricing agreements with 26 pharmaceutical companies that address the pricing of drugs provided to the U.S. Medicaid program.
Washington's pressure on member countries is also increasing. In June, the United States initiated a Section 301 investigation regarding Germany's alleged 'persistent underpayment' for innovative drugs. This investigation could lead to additional tariffs that exceed the agreed-upon ceiling of 15 percent under the Trade and Technology Agreement.
European countries are showing solidarity to counter U.S. pressures. In an informal meeting in Dublin last week, ministers from Ireland, France, Germany, Italy, Denmark, Sweden, the Netherlands, and Belgium discussed the establishment of an EU-level pharmaceutical working group to coordinate their response.
In this article, Vandenbroucke and his colleague argue that Brussels should initiate an ACI investigation in response to Washington's drug pricing policy. This tool allows the EU to impose tariffs and restrictions on services in response to external threats.
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