The Netherlands’ knack for being one of Europe’s toughest drug pricing negotiators may turn into a liability. The Dutch Association for Innovative Medicines (VIG) is warning that US President Donald Trump’s ‘Most Favoured Nation’ (MFN) pricing policy could make low-price markets like the Netherlands less attractive for early launches, leaving patients waiting longer for new medicines.
“When price levels in a small country become part of international comparisons for much larger markets, it changes the strategic considerations for companies,” said VIG general manager Carla Vos, adding that “a low price in the Netherlands can then take on significance that extends beyond our own market.”
Speaking to Euractiv, ING healthcare economist Diederik Stadig warned that, given mounting US pricing pressure, the Netherlands may be among the first countries companies turn to for revenue growth. However, he noted that improving EU competitiveness will also rely on simplifying rules, deeper funding and quicker approvals.
A change in the implicit equilibrium
VIG explained that for years, the US accepted higher drug prices that enabled investment in R&D, while European countries, with their regulated systems, kept prices relatively low.
“For many innovative pharmaceutical companies, the vast majority of their revenue comes from the US, compared to between 0.5% and 1% in a country like the Netherlands,” Vos said.
Vos warns that the entire system is now under pressure as the US no longer wants to accept the status quo and seeks price levels in line with the net prices paid by other wealthy countries.
Dutch consumer spending 29% of US levels
Stadig told Euractiv that pharmaceutical prices in the Netherlands are low not only compared with the US, but also relative to most European peers.
“This is a result of the different and decentralised ways in which European medicine prices are negotiated,” Stadig said. ING estimates that, corrected for GDP, for every €100 an American spends on medicines, a Dutch consumer spends about €29, compared with roughly €90 in the UK.
“So, the Netherlands will definitely be a country that pharma companies will look to, to increase revenues,” Stadig said.
Despite the upheaval, new analysis by ING suggests the immediate impact of Trump’s MFN-linked measures on US prices may be limited. These include a proposed direct-to-consumer website for branded drugs and a new Medicaid pricing mechanism.
But Stadig added that broader forces, including price negotiations under the Inflation Reduction Act (IRA) and growing competition from biologics, are exerting sustained downward pressure on US prices.
With the US accounting for roughly two-thirds of branded pharmaceutical profits, he described this as “a strategic risk for pharma companies” because there is increasing price pressure in their most profitable market. “So, pharma companies will increasingly look outside the US for profits,” said Stadig.
“This is not to say that European prices should rise to American levels – the American healthcare delivery system is costly and inefficient,” Stadig added. “But price is a short-term response to fix competitiveness.”
Getting rid of fragmented rules, deepening funding pools, and speedier approvals are just as important as drug pricing, Stadig noted.
VIG, however, expects the impact of Trump’s MFN policies in the Netherlands to be felt most during the introduction of new medicines. “[This is because] drug prices are agreed to for longer periods of time. List prices will be higher. The question is how different European countries respond,” Stadig explained.
[VA, BM]
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