Innovative Drugs: France Faces the Price War Launched by Trump
In the face of Donald Trump’s tariffs, French public policy makers are trying to solve a complex equation. How can they encourage public and private organizations to develop innovative drugs that address unmet medical needs—all within a tight budget, and in a timely and equitable manner? Is this an impossible task?
Augustin Rigollot, University of Montpellier
On May 12, 2025, Donald Trump announced an executive order to lower drug prices in the United States, accusing other countries of taking advantage of excessively low prices. On August 4, he issued an ultimatum to 17 major pharmaceutical companies to that effect.
This has raised concerns in France and across Europe about a rise in drug prices, particularly for new drugs that address unmet medical needs. Since the U.S. pharmaceutical market is the largest in the world, a price drop in the world’s largest economy will correspondingly lead to a price increase in other countries. In the United States, price negotiations take place primarily between pharmaceutical companies and private insurers, with limited government intervention, resulting in particularly high prices. In Europe, by contrast, prices are generally lower because they are negotiated by the public payer, with significant government influence. However, the Trump administration wants the United States to systematically benefit from the lowest price among those observed in other countries. This leaves pharmaceutical companies with only two options:
- lower prices in the United States to the lowest levels seen elsewhere, particularly in the European Union (EU), which would result in pharmaceutical companies suffering significant revenue losses on a global scale, thereby hindering their ability to invest in innovation;
- raise drug prices in EU countries and elsewhere around the world by bringing them in line with U.S. prices, in order to preserve their global profit margins and limit the decline in their revenues in the United States.
Overall, the countries currently receiving the largest discounts will be the hardest hit by any price increases, and the overall cost of therapeutic innovation will rise—posing a risk to its accessibility.
This news story highlights healthcare models around the world, ranging from public insurance financing, as in France, to private insurance financing, as in the United States. Given this, what tools does France have at its disposal to address rising prices for innovative drugs? What about, in particular, those used to treat cancer (oncology)?
Low drug prices in France
France benefits from effective medical-economic negotiations on drug prices. As a result, drug prices there are much lower thanin the United States, which leaves our country highly vulnerable to potential price increases. There is a historical reason for this: France accounts for a large volume of drug sales in Europe, covered by mandatory public health insurance. In effect, the market is guaranteed for manufacturers, which serves as a bargaining chip for negotiating lower prices.
France has a strict regulatory framework governing prices. Low prices in our country keep out-of-pocket costs for households very low, among the lowest in Europe.
However, France is facing increasing budgetary constraints, as illustrated by the 5 billion euros in savings projected in the 2026 financial statements. Its room to maneuver in the face of rising innovation costs would therefore be particularly limited.
Access to Medicines
France has lower access to pharmaceutical innovation than its European neighbors: 63% of new drugs are available in France, compared to 88% in Germany. For example, in oncology (the diagnosis and treatment of cancer), France ranked 6th in Europe in terms of availability in 2020. To explain this lack of accessibility, pharmaceutical companies point to shortcomings in the French drug market. Among the barriers to accessibility, the French Pharmaceutical Industry Association (LEEM) highlights the excessively low prices of drugs in France, which are not competitive compared to similar European countries. This lack of attractiveness is not limited to price and is reportedly exacerbated by excessively long delays in gaining access to the French market, particularly compared to Germany. This situation does not encourage manufacturers to prioritize the French market for their product launches.
The early access procedure allows us to significantly qualify this argument regarding the time it takes to gain access.
Under this expedited procedure, a drug deemed innovative—one that addresses a major and serious unmet medical need—is reimbursed on the market without having to wait for the marketing authorization (MA) process to be completed. This has drastically reduced wait times for more than 120,000 patients in France, covering about 100 expensive and innovative drugs, particularly in oncology.
Reasons for Concern
Another concern, rooted in solidarity, reflects the expectations of the public taxpayer. It is illustrated by Opinion No. 135 issued by the National Consultative Ethics Committee (CCNE) in 2021. The CCNE is concerned about the sustainability of our social model.
"The very high prices of certain innovative treatments could jeopardize the financial stability of healthcare systems as they currently operate."
Since that opinion was issued, concerns have grown in tandem with rising innovation costs. Now the world’s most expensive drug, Libmeldy (a treatment for metachromatic leukodystrophy), costs 2.5 million euros for the full course of treatment in Europe and approximately 4.25 million dollars in the United States.
Risk-Sharing Agreements
Among the many mechanisms available to us, some allow us to control pricing and market access very early in the negotiation process, while supporting high-performing innovations. This is the case with risk-sharing agreements. They have been in use for about fifteen years and are enshrined, for example, in Article 54 of the 2023 Social Security Financing Bill (PLFSS) for advanced therapy medicinal products (ATMPs). These agreements between a pharmaceutical company and the public payer aim to limit the financial impact of new treatments.
These contracts are still underutilized in France. They represent a source of efficiency that public policymakers could tap into in the event of rising prices for therapeutic innovations, against the backdrop of a pricing war originating from Donald Trump’s United States.
We distinguish between:
- Purely financial agreements (financial-based agreements) are the most common. They cap expenditures, with volume thresholds (price-volume agreements) beyond which the manufacturer reduces its price in order to stabilize the budget. In exchange, the public payer guarantees volumes and better market access.
- Performance-based risk-sharing agreements that link payment to the drug’s actual performance, rather than solely to the results of clinical trials. These agreements focus on clinical efficacy criteria and include provisions for full or partial reimbursement by the manufacturer in the event of insufficient real-world results. These contracts are particularly well-suited for drugs with a limited target population (to ensure that real-world performance can be properly monitored) or for which there is a high degree of uncertainty regarding real-world efficacy at the time of market launch.
The Italian Model in Oncology
Italy is often considered the most advanced European country in terms of risk-sharing agreements, particularly in oncology. In 2017, the savings generated by these contracts were estimated at nearly half a billion euros (35 million from performance-based contracts alone). In oncology, the time to market for drugs covered by this program is estimated to have been reduced by 256 days.
This rollout in Italy was accompanied from the outset by a sophisticated system for collecting and evaluating real-world performance data, managed by the Italian National Agency for Medicines and Health Products (AIFA). By 2016, it already had 172 real-world data registries covering more than 300 risk-sharing agreements, involving approximately 900,000 patients. The additional cost of this monitoring was estimated to range from 30,000 to 60,000 euros per drug per year in the first year, decreasing thereafter. The issue of how this cost is shared between the public payer and the pharmaceutical company must also be taken into account.
France has lacked this approach to collecting real-world performance data. This partly explains why we are lagging behind and why there are so few performance-based contracts—about fifteen in ten years, according to health economist Gérard de Pouvourville.
Today, the challenge remains to develop these contracts without having performance monitoring tie up healthcare resources in a context of limited time and medical resources.
Solidarity Put to the Test
The challenge of striking a balance between supporting innovation, ensuring its accessibility, and maintaining the sustainability of the healthcare system is not unique to France. It is such a critical issue that it was incorporated into the Pharmaceutical Strategy for Europe in 2020. The European Hi-Prix project is seeking a solution to this challenge through the creation of the Pay for Innovation Observatory, which provides an online directory of all innovation funding mechanisms.
In the face of soaring prices for innovative drugs—which are far beyond what health care systems can sustain—an ethical debate is also emerging, one that economic forecasts alone cannot resolve.
If the cost of innovation—particularly for orphan or rare diseases—continues to rise, and if, at the same time, advances in diagnostics, particularly genetic testing, reduceuncertainty about individuals’ future health risks and conditions, there is a risk of undermining the willingness to pay—the foundation of the tacit contract of insurance solidarity in our societies.
Augustin Rigollot, a graduate of the École Normale Supérieure in economics and philosophy, specializing in health economics (UPEC), a sixth-year medical student on clinical rotation, University of Montpellier
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