The Trump administration is preparing to launch a new investigation under Section 301 of the Trade Act of 1974 to determine whether U.S. trading partners are underpaying for prescription drugs, potentially paving the way for a new round of tariffs, the Financial Times reported, citing people familiar with the matter.
The move underscores President Donald Trump’s ongoing complaints that other countries pay far less for medicines than the U.S., and his vow to “equalize” global drug prices. “In London, you’d buy a certain drug for $130, and in New York, you pay $1,300 for the same thing,” Trump said last week, referring to weight-loss medications.
U.S. drug prices are nearly three times higher than those in many developed countries, the report said, citing data from The Rand Corporation. For instance, Novo Nordisk’s Ozempic costs about $936 for a one-month supply in the U.S., compared with $147 in Canada and $83 in France, per KFF data.
The new probe could result in broad new tariffs on foreign goods, reigniting trade tensions that had eased after Trump rolled back some earlier duties. It also reflects his administration’s broader push to pressure drugmakers and foreign governments to lower prices for American consumers.
Major pharmaceutical companies, including Pfizer (NYSE:PFE), AstraZeneca (NASDAQ:AZN), Novo Nordisk (NVO), and Eli Lilly (NYSE:LLY), have engaged with the White House on pricing issues, the FT noted. However, the administration’s threats of steep tariffs on imported branded and generic drugs have unsettled the industry.
While Trump has previously struck agreements with the EU and the UK to limit drug tariffs and continue negotiations, he has also warned of potential 100% duties on branded drug imports if companies fail to increase U.S. manufacturing. So far, those tariffs have failed to materialize, and officials have said drugmakers will have time to demonstrate domestic investments and price reductions.
Drugmakers of interest: Eli Lilly (NYSE:LLY), Pfizer (NYSE:PFE), Merck (MRK), Gilead (GILD), Bristol Myers (BMY), Johnson & Johnson (JNJ), Regeneron (REGN), Amgen (AMGN), AbbVie (ABBV), Merck KGaA (OTCPK:MKGAF), Sanofi (SNY), GSK (GSK), AstraZeneca (NASDAQ:AZN), Novo Nordisk (NVO), Roche (OTCQX:RHHBY), Novartis (NYSE:NVS), Teva Pharmaceutical (TEVA), Viatris (VTRS), Amneal Pharmaceuticals (AMRX), Dr. Reddy’s Laboratories (RDY).