EU retaliating to Trump drug tariffs would be ‘a bad idea', says industry
The European pharmaceutical industry has urged Brussels not to retaliate if Donald Trump brings in threatened tariffs on imported drugs, amid fears he could impose the levies as early as next week.
The US president said last week that the sector-specific tariffs were coming 'very soon' and there is concern in Brussels that he could impose them imminently to give him further leverage ahead of his self-imposed 9 July deadline for trade deals with the EU and about 60 other countries.
However, at a briefing in the Belgium capital on Thursday, the president of the European Federation of Pharmaceutical Industries and Associations said it would hurt everyone if the EU hit back with its own import duties.
'We're shipping a lot of exports out of the US into Europe,' Stefan Oelrich said. 'If we add tariffs to that, it's going to be negative for both sides. If we reciprocate on tariffs, it's just a bad idea. It's a bad concept.'
The dynamics of the EU's negotiations with the US remain finely balanced. France and Germany both back a 'quick' UK-style deal and many member states, particularly the Baltic nations, are keen to build on warmer relations with Trump after his 'big win' at the Nato summit over increased defence spending, as they want to keep the president supporting Ukraine.
With the clock ticking, speculation is mounting that the EU will do a thin deal on auto and steel – similar to the bilateral agreement brokered by Keir Starmer in May, which comes into force on Monday – but with no optimism in the pharma industry that it will be included.
Oelrich said: 'There's no specific ask [of the US] other than … to the degree possible to limit trade barriers to zero, which would be the ideal case for us and/or something similar to zero.
'Tariffs will increase the cost of medicine and care. Tariffs will also create, ultimately, higher costs to patients.'
After EU leaders met on Thursday, the German chancellor, Friedrich Merz, urged the EU to do a 'quick and simple' trade deal rather than a 'slow and complicated' one. His French counterpart, Emmanuel Macron, said he wanted a quick and pragmatic agreement, but could not accept terms that were not balanced.
Oelrich, who is a member of the board of management at German pharmaceutical company Bayer, also called for a series of reforms on financing, pricing and regulation of drugs, saying such changes could help to restore Europe's former lead in research and development of drugs.
His call comes amid fears the that EU is losing out to the US and, increasingly, China, which outpaced Europe in 2023 as originator of new active substances, with 25 brought to the world market, compared to the EU's 17 and the US's 28.
Sign up to Business Today
Get set for the working day – we'll point you to all the business news and analysis you need every morning
after newsletter promotion
Oelrich said data showed that 'a quarter of drugs in the past 10 years approved by FDA' in the US had not made it to Europe because of non-tariff barriers, such as differing national regulations and pricing. 'Many of the biotech companies are not even bothering engaging in Europe. For them it makes no sense,' he said.
Among the other non-tariff barriers he cited were practices in the industry known as 'clawbacks' whereby governments in large economies including France and the UK agree a specific budget for procurement of particular drugs. But any surplus used in hospitals and clinics is paid for by the pharma companies as a clawback.
'It's totally senseless. And that's happening in Europe, and that needs to stop. I could name you endless countries that actually are doing this in Europe,' he said.
'What happens too much in Europe is that the richest countries would like to align to the lowest prices in lower equity countries … this leads to a situation which is unsustainable.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Sun
31 minutes ago
- The Sun
Mercedes ramp up sensational Max Verstappen swoop despite bad blood with F1 rival George Russell
MERCEDES are ramping up their pursuit to sign Max Verstappen to form a dream team with George Russell. Toto Wolff confirmed today that there had been behind closed doors talks with the four-time world champion and that Mercedes were 'exploring' their future plans. 5 5 Russell, who is out of contract next year, also said that his team have been talking to Verstappen about signing a deal for 2026. The Brit, 27, also suggested on Thursday that his contract talks with Wolff had been delayed by the ongoing talks with Verstappen. Wolff said: "There is no delay in George's contract negotiations because it's pretty clear, since a long time, what our timings were and are. "We have known each other for such a long time, so there is no such thing as a delay. "As team principal of the best car brand in the world, it's clear you explore what a four-time world champion will do in the future, "That could be long into the future. That has no effect on us putting a signature on George's contract." Four-time world champion Verstappen has a contract with Red Bull until 2028 which is said to have a break clause which could be triggered to prompt an exit. 'That's not how it is and how it works. And I come back to my previous question. 'I want to just have the conversations behind closed doors not in town halls. And we have two drivers that have been in our programme since a long time. 'Drivers that I'm perfectly happy to have. Drivers that will do great in the future of the team. So it's a bit of a different situation.' Wolff suggested that Russell had been weighing up his options outside of Mercedes as well. The legendary Austrian boss added: 'We are going into territory that I don't want to discuss out here, but people talk, people explore. 'The most important thing is that in our organisation, we are transparent. But it doesn't change a millimetre of my opinion of George, his abilities or anything else. 'I like what George says and I'm always supportive of the driver. There is no such thing as saying things I wouldn't want him to say. 'We are very transparent in the team of what we do, what we plan. 'We've been like that since I was being put in charge of that. So that's not the issue. At the moment clearly, you need to explore what's happening in the future.' Eyebrows have been raised over whether Verstappen and Russell could fit in a team together with the duo having a history of bad blood. 5 The most recent incident involved Verstappen ramming into the British driver at the Spanish Grand Prix three-weeks ago. When asked if the pair could drive together at Mercedes, Wolff added: 'I can imagine every line-up. 'Nico Rosberg and Lewis Hamilton fighting for a world championship, so everything else afterwards is easy. 'There's pros and cons of having two drivers fighting each other hard. We've seen examples where that functioned and other examples where it didn't. 'When it comes to the contract situation, you know, our sport is pressure, constant pressure, whether you're in the car, outside of the car, you just need to cope with that. 'George knows that, like any other driver.' Earlier this year Wolff said zero negotiations had been held with Verstappen and that they were not 'flirting' with the prospect of signing him. He said: 'There is no flirt (with Verstappen) in that sense. You can flirt or you have conversations. 'It is in the nature of the sport that you talk about people, whether they're in the car or in the factory or in the racetrack. 'Most important thing is to stay true to your values. And for me, that is being integral and humble about the situation, respectful of the people. 'That's what we are trying to do in the team. I've been in situations like this before. Some of the conversations are more difficult than others.' Russell himself made it clear he was aware of Mercedes' interest in Verstappen, hinting that it could be delaying his contract renewal due at the end of the season. The Brit, 27, told Sky: "It's only normal that conversations with the likes of Verstappen are ongoing. "But from my side, if I'm performing as I'm doing, what have I got to be concerned about? There are two seats in every Formula 1 team. Toto has made it clear to me that how I'm performing is as good as anybody. "There is only one driver that you can debate in terms of performance. These are his words and not my words, and that is why I have no concern about my future. "But there are two seats to every team and I guess he needs to think who are those two drivers."
The Herald Scotland
36 minutes ago
- The Herald Scotland
Beijing deal will speed China's export of minerals to US
Mr Bessent said on Fox Business Network's Mornings With Maria that US President Donald Trump and Chinese President Xi Jinping 'had a phone call' previously 'and then our teams met in London, ironed this out, and I am confident now that we, as agreed, the magnets will flow'. 'Part of the agreement was tariffs coming down and rare earth magnets starting to flow back to the US,' Mr Bessent said. 'They formed the core of a lot of our industrial base. They were not flowing as fast as previously agreed.' His comments come after Mr Trump announced two weeks earlier an agreement with China that he said would ease exportation of magnets and rare earth minerals That pact cleared the way for the trade talks to continue. The US has previously suspended some sales to China of critical US technologies like components used for jet engines and semiconductors. But it has also agreed to stop trying to revoke visas of Chinese nationals on US college campuses. Mr Bessent added of critical mineral exports: 'What we're seeing here is a de-escalation.' Commerce secretary Howard Lutnick told Bloomberg TV that the deal was signed earlier this week. China's commerce ministry said on Friday that the two sides had 'further confirmed the details of the framework', though its statement did not explicitly mention US access to rare earths that have been at the centre of the negotiations. 'China will, in accordance with the law, review and approve eligible export applications for controlled items. In turn, the United States will lift a series of restrictive measures it had imposed on China,' it said. Initial talks in Geneva in early May led both sides to postpone massive tariff hikes that were threatening to freeze much trade between the two countries. Later talks in London set a framework for negotiations and the deal mentioned by Mr Trump appeared to formalise that agreement, setting the stage for Mr Bessent's comments on Friday.
Sky News
an hour ago
- Sky News
Welfare concessions 'common sense', says PM - as he defends U-turn
Sir Keir Starmer said changes to his welfare bill "strike the right balance" after making concessions to his backbench MPs. The prime minister described the U-turn as "common sense" and said it means "we can now get on with the job". Sir Keir faced a significant rebellion over plans to cut sickness and disability benefits as part of a package he said would shave £5bn off the welfare bill and get more people into work. Speaking to reporters on Friday, he stood by his position that the welfare system needs reform as "it doesn't work, and it traps people". He added: "We need to get it right. That's why we've been talking to colleagues and having a constructive discussion. "We've now arrived at a package that delivers on the principles with some adjustments, and that's the right reform, and I'm really pleased now that we're able to take this forward. "For me, getting that package adjusted in that way is the right thing to do, it means it's the right balance, it's common sense that we can now get on with it." The concessions include exempting existing Personal Independence Payment claimants (PIP) from the stricter new criteria, while the universal credit health top-up will only be cut and frozen for new applications. 5:45 More money will also be front-loaded into helping people find jobs, though it is not clear how much beyond the £1bn already announced. The changes came after 127 Labour MPs signed an amendment calling for the cuts to be delayed and consulted on with disabled people. Rebels feared the reforms wouldn't actually help people find work while pushing thousands of disabled people and children into poverty, as per the government's own impact assessment. The discontent threatened to derail the Universal Credit and Personal Independence Payment Bill when it comes before the Commons for a vote on Tuesday, on the week that marks a year of Starmer in government. Asked what he would do about a "hole" in the public finances that the changes are said to leave, Sir Keir said the funding will be set out in the autumn budget "in the usual way". The concessions on PIP alone will protect an estimated 370,000 people currently receiving the allowance who were set to lose out following reassessment. Economists at the Institute for Fiscal Studies and the Resolution Foundation have both suggested that the changes could reduce savings intended in the original package by up to £3bn. Chancellor Rachel Reeves is also under pressure to find money to pay for the U-turn on cuts to winter fuel, which followed a drubbing at the local elections in May. Asked about the series of U-turns, Work and Pensions Secretary Liz Kendall earlier said: "Sometimes there's strength in listening. "I really believe that to be the case, that you end up in the right position when you talk to all of those with knowledge and experience and actually, if you want decisions to be the right ones and to last for generations to come, I believe that's how you make the right changes." However, she would not guarantee the bill will pass next week. Some 83 Labour MPs would need to rebel for the government to be defeated. 0:43 Last night Dame Meg Hillier, one of the leading rebel voices, hailed the concessions as "massive changes" to protect vulnerable people and involve disabled people in the design of future reforms. However, not all the rebels have been satisfied with the changes, with several suggesting they would create a "two-tier system". Sky News is aware of at least 20 MPs who currently intend to still vote against. Many others are undecided. The concessions came after Downing Street publicly stuck to its guns while engaging in a frantic ring-around to get rebels onside, which further angered MPs. Many have called for a reset in relations with Downing Street, as the fallout from the rebellion threatens to cause lasting damage. Conservative leader Kemi Badenoch criticised the U-turn, saying the government's failure to make "minor savings" on welfare showed they were unable to deal with major issues.
