iStock,
Iurii Kuzo
As Trump has pressured drugmakers to lower the cost of medicines in the U.S., the pharma industry has coalesced behind a message of rebalancing what nations pay to better reflect the innovation and value of drugmaking.
Eli Lilly will soon announce higher prices for its drugs in markets like Europe in an effort to “align prices across developed countries.” The move comes as pressure mounts from the Trump administration to lower the cost of medicines to match what other equivalent nations pay or
face consequences
.
In a statement issued Thursday responding to President Donald Trump’s
Most Favored Nation
drug pricing initiative, Lilly said that price adjustments for the European market will be announced by September 1. An agreement will also be made with the U.K. government to increase the list cost of Lilly’s obesity drug Mounjaro while keeping it available on the National Health Service.
“Lilly supports the administration’s goal of keeping the United States the world’s leading destination for biopharmaceutical research and manufacturing, and the objective of more fairly sharing the costs of breakthrough medical research across developed countries,” Lilly said. “This rebalancing may be difficult, but it means the prices for medicines paid by governments and health systems need to increase in other developed markets like Europe in order to make them lower in the U.S.”
As Trump has
pressured drugmakers
to lower the cost of medicines in the U.S., the pharma industry has coalesced behind a message of rebalancing what nations pay to better reflect the innovation and value of drugmaking. On recent earnings calls, pharma CEOs like Lilly’s David Ricks have repeated the message but Lilly’s statement today is the first concrete step toward actually changing prices.
It’s unclear what leverage Lilly will have as drug prices are typically negotiated with the health authorities based on value-based pricing.
Ricks himself admitted
on an earnings call earlier this month that these nations are not exactly fighting to pay more for drugs.
Moreover, the Trump administration has also not provided a legal rationale for Most Favored Nation drug pricing. In Trump’s prior term, the policy was overturned by the courts. But the president has threatened to use regulatory levers elsewhere such as patent enforcement to force drugmakers to drop their prices, most recently in a batch of letters sent to the CEOs of 17 Big Pharma companies, including Lilly.
In today’s statement, Lilly pointed to the complex nature of the U.S. health system that keeps drug prices higher than they need to be. Specifically, the pharma flagged multiple cross subsidies, abuse of government programs like 340B and insurance cost-sharing burdens for patients.
“While we agree that the costs for breakthrough medicines should be more fairly shared across developed countries, we must also address the underlying structural issues in the U.S. that have contributed to high drug prices,” Lilly said.
Nevertheless, the company asserted that it has taken steps to lower costs for U.S. consumers. Lilly has bolstered its LillyDirect service, which offers drugs such as its weight loss blockbuster Zepbound at a reduced cost for people who do not use their insurance. This kind of direct-to-consumer outreach has been encouraged by the Most Favored Nation policy in an
effort to cut out
pharmacy benefit managers, long seen as “middle-men” in the drug selling process. Lilly has also reduced insulin prices by 70% and capped what people pay at $35 per month.
The statement also took a stab at defending the pharmaceutical industry from
tariffs
, another of the president’s policy priorities, which Lilly says could increase the cost of drugs.
“Broad tariffs would raise costs, limit patient access, and undermine American leadership, especially for companies already investing heavily in domestic manufacturing,” Lilly said. “We urge the administration and Congress to prioritize strategic incentives that strengthen U.S. manufacturing and supply‑chain resilience without sacrificing access, affordability, innovation, or American leadership.”
