Bayer Warns of Higher Drug Prices in Europe Amid US Pricing Pressure

German pharma giant Bayer has warned that European drugmakers must raise prices on new medicines in Europe to maintain profits amid US pressure to lower drug costs for Americans.

Last year, US President Donald Trump issued an executive order to force big pharma to benchmark key medicines sold in the US against prices in other countries, citing unfair pricing gaps. As of March, 16 major drugmakers have struck deals with Washington to cut prices in the US market in exchange for three years of tariff relief.

Though Bayer was not among the companies, the head of its pharmaceuticals division, Stefan Oelrich, told Bloomberg on Wednesday that the company is preparing for a new pricing system and is in talks with governments in Europe, Japan, and other wealthy nations to push for higher prices on new medicines to offset discounts for US consumers.

“In Europe, we need to raise the price level for new product launches,” Oelrich told Bloomberg. “Otherwise, as an industry – and this naturally applies to us as well – we’ll be faced with additional discounts in the US that wouldn’t allow us to recoup our total expenses.”

He made similar remarks to the Financial Times, warning that Europeans will have to pay more for medicines if the region is to remain an attractive market for new drugs. He previously warned that linking US prices to European levels could force companies to choose between markets, as launching in lower-priced Europe now risks undermining US revenues.

New drug launches in Europe have dropped by around 35% over the past ten months since Trump’s order, Reuters reported on Wednesday, citing GlobalData. Some companies have even withdrawn products from Europe. Amgen pulled cholesterol drug Repatha from Denmark. Indivior withdrew anti-addiction drugs Subutex and Suboxone from Sweden and other markets.

Oelrich’s warning comes amid a broader US-EU trade rift since Trump’s return to the White House, culminating in a trade deal last year that was widely seen in Europe as humiliating. The agreement caps tariffs on most EU goods entering the US at 15%, while tariffs on some American imports are eliminated. The bloc also agreed to invest $600 billion in the US and purchase $750 billion worth of American energy.