European Pharma's Exposure to U.S. Drug Pricing Policies

The increasing pressure from U.S. President Donald Trump to lower drug prices has significant implications for European pharmaceutical companies, particularly those heavily reliant on the U.S. market for sales. This situation raises questions about the sustainability of their business models amid changing pricing policies.

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Among the ten largest biopharmaceutical companies in the Stoxx 600 health index, five—Roche, Novo Nordisk, GSK, Argenx, and UCB—derive a majority of their sales from the U.S. market. Argenx stands out as the most exposed, with 85% of its total sales originating in the U.S., while Merck KGaA and Bayer are the least exposed, with approximately 30% of their sales from the U.S. AstraZeneca, aiming for $80 billion in revenue by 2030, generates 42% of its sales from the U.S. and is actively seeking to increase this share.

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Trump's administration has implemented the Most Favored Nations (MFN) drug pricing policy, which sets U.S. drug prices at the lowest levels paid by other wealthy countries. This policy is part of a broader strategy to reduce consumer costs and has prompted many pharmaceutical firms to negotiate deals with the administration. In May 2025, Trump signed an executive order establishing MFN pricing and has since urged 17 major drugmakers to align U.S. prices with those overseas.

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Both Roche and Novartis, two of the largest European pharmaceutical companies, have expressed support for the administration's goal of lowering drug costs for Americans. However, they have not confirmed any imminent deals. Novartis stated it is "in discussion with the Administration," reflecting the ongoing negotiations between pharmaceutical companies and the U.S. government.

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Analysts have raised concerns about the potential consequences of these pricing deals. Jefferies analysts noted that AstraZeneca's MFN deal might be less impactful than perceived, suggesting that while it may benefit U.S. consumers, it could lead to reduced access to drugs in European markets. This sentiment highlights the tension between pricing strategies aimed at U.S. consumers and the implications for international markets.

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As negotiations continue, major companies like Roche and Novartis are expected to finalize drug pricing deals with the Trump administration. The outcomes of these discussions will likely shape the future landscape of pharmaceutical pricing and access in both the U.S. and Europe.

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• “[AstraZeneca's] MFN deal is more benign than appreciated, but EU countries may see access to drugs reduced,” — Jefferies Analysts

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• “Both companies told CNBC they supported the administration's goal of lowering drug costs for Americans but declined to confirm an imminent deal.” — Novartis Representative

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This evolving situation underscores the intricate balance European pharmaceutical companies must maintain as they navigate U.S. market pressures while considering their global operations.

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