“If we don’t work together and act as a team, countries are inevitably tempted to go it alone,” French Trade Minister Nicolas Forissier told POLITICO.
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 procedure is quite heavy, but already opening an examination would have an effect of its own,” the paper argues.
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. “Higher foreign payments thus become a source of revenue for the American government itself,” they write.
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.
Vandenbroucke, an economist by training, said the net effect would likely be an extreme increase in European drug prices — or the withdrawal of drugs from the market — while producing comparatively modest price cuts in the U.S.
According to one forecast cited in the paper, prices could triple in countries used as benchmarks, while U.S. prices would fall by just 7.5% to 15%.
“The consequences would reach well beyond the medicines budget, putting pressure on the solidarity that universal insurance is designed to secure,” the authors write.