Pharma Industry Warns Trump's Drug Pricing Policy Could Delay New Treatments Globally

Novartis chief executive officer Vas Narasimhan has issued a stark warning about the potential consequences of the U.S. drug pricing policy under President Donald Trump, describing the situation as “very difficult” for both drugmakers and patients.

In an interview with CNBC, Narasimhan emphasized that Novartis is actively working to persuade European and Japanese governments to reform how they reward pharmaceutical innovation. Without these changes, he cautioned that novel medicines could face delayed market entry in these regions, leaving patients without access to critical treatments.

The most-favored-nation (MFN) drug pricing policy, implemented by the Trump administration last year, ties the prices of drugs in the U.S. to those in comparably wealthy countries. The policy aims to lower drug prices for American consumers but has drawn criticism from industry leaders who argue it could undermine global innovation incentives.

President Trump has long criticized what he calls “foreign nations freeloading on American-financed innovation,” advocating for policies that reduce drug costs for U.S. patients.

Japan Faces Risk of Missing Out on New Blockbuster Drugs

Japan could miss out on breakthrough treatments due to the Trump administration’s MFN pricing plan, according to a report by Nikkei Asia.

The policy, which matches U.S. drug prices to those in other major countries, will apply to medications purchased through Medicare and Medicaid programs. Japan is included among the 19 reference countries for price calculations, alongside South Korea, Australia, and several European nations.

Drug manufacturers whose products are targeted by the policy must participate in the Medicare pricing scheme. However, companies may choose not to launch their products in Japan to avoid lowering prices in the U.S., potentially depriving Japanese patients of access to new therapies.