The president has pushed to align what Medicare pays for medicines with prices in other wealthy countries. A research team at Brigham and Women's Hospital examined 195 patent-protected drugs that together represented $87.9 billion of Medicare spending in 2024. They estimated Medicare's net costs after confidential rebates and discounts, then compared those figures against 19 reference countries. The findings were published Sunday in The Lancet.
Here is the rub: for roughly three quarters of the drugs, the team concluded that cutting Medicare's price would forfeit more US revenue than companies make from sales of the same medicine in whichever lower-cost reference nation sets the benchmark. Faced with that math, the paper says drugmakers could respond by charging more in some countries or by skipping certain markets entirely.
The authors estimate that aligning Medicare prices with those in the reference countries would trim spending by $11.6 billion across two pilot programs that the administration has put in place to trial the policy. But if the 17 companies that reached separate pricing arrangements with the White House are exempted, the projected savings shrink to $3.3 billion. Since then, nine additional drugmakers reached pricing deals earlier this month, and those were not included in the analysis.
The comparisons in the study used estimated net payments after confidential rebates and discounts.
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Companies are not waiting on the sidelines. Several have cut their own arrangements with the White House, and some are using the US stance as leverage to push for higher tags elsewhere. For example, Astellas Pharma Inc. said that, amid concerns about Trump's pricing policy, it secured a higher price in Japan this year for a new eye medicine.
Others are trimming launches in Europe. This year, Biogen Inc. CEO Chris Viehbacher said the company would roll out its postpartum depression drug Zurzuvae in just a handful of European countries. Roche Holding AG has suggested it may forgo introducing a still-unapproved breast cancer tablet in Switzerland, its home country.
If Medicare leans into international benchmarking, the numbers point to sizable US savings, but carve outs and company tactics could dilute the effect and shift pressure abroad. For everyday buyers, that can show up as uneven access or price changes depending on where you live and what drug you need, while investors are left weighing which companies hold pricing power and where launches might be delayed.
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