Europe’s pharma under squeeze

Europe’s drugmakers are being squeezed at once by new United States tariff rules, lower-price demands in America, and China’s rise as a biotech deal hub. (cnbc.com) On April 2, President Donald Trump imposed a 100% tariff on patented pharmaceutical products and ingredients, with the White House saying the levy starts in 120 days for larger companies and 180 days for smaller ones. Products from the European Union face a 15% tariff instead, and companies that sign both United States onshoring and most-favored-nation pricing deals can get a 0% rate through January 20, 2029. (whitehouse.gov) Most-favored-nation pricing means the United States pushes drugmakers to match the lowest price they offer in a comparable rich country. Reuters reported on April 2 that 16 large drugmakers had publicly announced agreements tied to tariff exemptions, including Pfizer, AstraZeneca and Novo Nordisk. (money.usnews.com) Europe enters that fight heavily exposed to the American market. Eurostat said the United States took 38% of the European Union’s extra-European Union exports of medicinal and pharmaceutical products in 2024, and European Union exports to the United States rose 29.6% from 2023. (ec.europa.eu) The pressure lands on an industry that still matters deeply to Europe’s economy. The European Federation of Pharmaceutical Industries and Associations estimated 2023 production at about €390 billion, exports at about €680 billion, research spending at about €50 billion, and employment at about 900,000 people across its Europe-wide total. (efpia.eu) The region’s long-term position has already been slipping. CNBC, citing ING research, reported that Europe accounted for nearly half of global pharmaceutical research and development in 1990, versus 26% in 2025, while the United States rose to 55%. (cnbc.com) China is adding a second source of pressure by becoming a bigger source of drug ideas, not just low-cost manufacturing. Reuters reported in February that global drugmakers were stepping up searches for China-developed experimental medicines, with analysts expecting licensing deals from greater China to reach another record in 2026. (marketscreener.com) European executives have complained for years about fragmented capital markets, uneven reimbursement systems, and slower rollout of common rules on pricing and clinical trials. ING healthcare analyst Diederik Stadig told CNBC that the new United States tariff and pricing push had “injected urgency” into that debate. (cnbc.com) The White House says the tariff policy is about national security and domestic supply chains, and it says the threat has already spurred about $400 billion in new United States investment commitments from pharmaceutical companies. Europe’s problem is that the same policy gives drugmakers a financial reason to move more production and pricing power toward the American market. (whitehouse.gov) That leaves Europe’s pharma model caught between its biggest export market and a fast-rising rival in Asia. The next decisions on where companies build plants, run trials and launch new medicines will show how much of the industry still stays in Europe. (cnbc.com)