Trump's trade war: Switzerland is facing a pharmaceutical payment crisis!

Trump's trade war: Switzerland is facing a pharmaceutical payment crisis!

The latest developments in US economic policy also have far-reaching effects on the Swiss pharmaceutical industry, which is increasingly under pressure. There is currently intensive discussion in Parliament about the consequences of Donald Trump's trade policy. In particular, the impact of tariffs on medicines represents a worrying prospect that pharmaceutical lobbyists perceive as a serious threat. Trump's plan is intended to reduce US drug prices, which could have serious consequences not only for the US but also for international markets. Lucerne newspaper reports that pharmaceutical products are currently duty-free in the US, but uncertainties remain.

The Swiss pharmaceutical industry plays a crucial role in the country's economy. 40.5% of Swiss exports come from this sector, and the industry has been responsible for almost half of the economic growth in recent years. In addition, the number of jobs in the pharmaceutical industry has doubled to 48,000 in the last 20 years. Companies like Roche and Novartis contribute over 1.7 billion francs annually to the tax burden. This stabilizing function is particularly important in times of crisis.

Trade relations and location strategy

The discussion in the Swiss Parliament, initiated by the FDP parliamentary group, also focuses on how trade relations with the USA should be redesigned. The Interpharma industry association is calling for a comprehensive location strategy, a regulatory brake and increased digitalization in the healthcare system. A key point is the call for greater investment in new, patent-protected medicines, as Switzerland reportedly invested only 0.39% of its gross domestic product in innovative medicines, compared to 1.74% in the US.

There is criticism of the federal government's cost-cutting policy, which could jeopardize the supply of new medications. Richard Saynor from Sandoz describes the possible price increases as “very questionable” and emphasizes the different views within the industry about the responsibility of European countries to dampen Trump’s price correction.

US trade policy and risks

On the other hand, Trump's administration plans to explore new trade barriers for foreign pharmaceutical manufacturers in an attempt to reduce drug prices in the US by up to 90 percent. An executive order signed by Trump gives manufacturers 30 days to voluntarily lower prices. If they do not respond to this call, the US government may consider further measures to enforce lower prices. Several US authorities will be involved in the implementation of the decree in order to take action against pricing policies that are perceived as unfair. The time reports that Europe fears possible tariffs on pharmaceuticals and Trump's order is seen as a wake-up call for the continent.

An example of the price discrepancy is the drug Eliquis, which costs $606 in the United States, while the cost in Sweden is only $114. The lack of central government price regulation in the USA could have long-term consequences, not only for America, but also for the international market. Observers are already warning of negative impacts on research, production and jobs in Europe if US policy continues in this direction.