Trump’s 100% Pharmaceutical Tariffs Won’t Apply to the EU and Japan

AI Overview
The U.S. pays more for prescription drugs due to a lack of national price controls and centralized negotiation compared to other high-income countries, which utilize strategies like price ceilings and government-led price negotiations. Factors contributing to these high costs include complex, fragmented reimbursement systems, the influence of private payers and pharmacy benefit managers (PBMs), the strategy of pharmaceutical companies to maximize profits in the U.S. market, and a legal prohibition on Medicare from directly negotiating drug prices.

Lack of Price Controls, No Central Negotiator: Unlike many other nations, the U.S. lacks a single body that can negotiate prices on behalf of the entire country, leading to a system where pharmaceutical companies set prices with limited restraint.

Government Price Negotiation: Countries like France and those in Europe use national formularies and negotiate prices with drug companies to cap costs, a mechanism absent in the U.S.

Medicare's Limitation: A key feature of the U.S. system is that federal law prohibits Medicare, the country's largest health insurance payer, from directly negotiating drug prices with manufacturers.

Fragmented System and Market Dynamics
Complex Reimbursement System: The U.S. system is highly fragmented, with private insurers and Pharmacy Benefit Managers (PBMs) involved in negotiations, creating complexity and limiting transparency.

PBMs and Lack of Transparency: PBMs negotiate on behalf of insurers but are often incentivized to accept higher drug prices and have incentives for opacity, making it difficult to determine the true costs.

High-Value Market: Pharmaceutical companies view the U.S. market as a prime place to extract profits, leading them to set higher prices due to the system's inability to effectively control costs.

Other Contributing Factors
Rapid Uptake of New Drugs: The U.S. market tends to adopt new drugs quickly, which can drive up overall costs.

Drug Company Arguments: Pharmaceutical companies argue that high U.S. prices are necessary to fund research and development, a claim that is often a point of contention in the debate over drug pricing.

What's generally needed in the US is wholesale reform of the healthcare industry.

https://www.cnbc.com/2025/05/14/why-...on-drugs-.html

Let me re-word that.

according to a White House official, delivering promised relief to economies including the European Union and Japan the many millions of sick and vulnerable Americans who rely on affordable pharmaceutical medication on a daily basis.

Nevertheless, I understand that Americans pay significantly more for prescription medicines than do citizens of other countries where prices are controlled through mechanisms like Australia’s Pharmaceutical Benefits Scheme (I also understand such a scheme is available in the US to veterans). And, given Trump's grievance-based approach to the world in general, it is no surprise that he describes Australia and other countries as "freeloaders" on the US.

Thanks for all that - phew! I know that lobbyists can be quite persuasive and contributed to the 100% number. Given that, what odds are there for reform?

They don't like Australia much and want the PBS pulled. Not gunna happen.

As it happens Americans will not have to pay tariffs on yummy yummy Aussie drugs because Australia's major manufacturer, CSL, has set up a plant in the US. So.

All Australian exports are GST free.

As I understand it, cattle born and raised in the USA are OK.

Many are not, though, and that was where the original issue was quite some years ago - imported into the US from Mexico or Canada as calves and then to the feedlots where they are fed re-constituted protein made from animal carcasses (something like that).

There is even a futures contract called feeder cattle.

Most Aussie beef is free range.

Wait wasn't it 5000%, I'm disappointed!

This will be fun for inflation in the US.

100% sure they just move it to the EU, rebrand and ship. They still have the sale.

thats bad

If you guys believe any of that nonsense you are the fools.

The Aussie PBS is a subsidy program. That is, the government subsidies (pays for in-part) these drugs. Pull out a dictionary if you need.

Instead of a drug costing $1000, citizens with a pension card or health care card (welfare) can buy the drug for $25 or whatever.

The Aussie government still pays the other $975... Derp

Trump is jealous. Australia look after their citizens with a great health care system (best in the world - number one) and programs like the PBS, that, actually, help the people in need.

Pays to listen to Mr. Orange Man. Especially his little rants, that his dumb little mind cannot control... :evil:

Reciprocal tariffs, remember?

Tariffs on Australia (10%) reciprocate the 10% GST that Australia charges the USA. Who then turn around and say too bad, that's just our system.

Trump says ok Croc Dundee, you get 10% too.

Sounds fair don't you think?

One of their closest allies and Aus were #2 or whatever on his Liberation Day naughty list.

All over a stupid 10% goods and services TAX (GST). That Trump said were because of Aussies not eating his Mad USA Cows (pssssst, your mad cows taste like ass - that's why we don't, and never will buy 'em).

You are right, Team Trump seems to really hate Australia.

Did the market rise today?

I bought some USA beef a while back. It was so shit I gave it to the dog.

EVEN THE DOG TURNED ITS NOSE UP.

I had to bin THE LOT.

BWAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHHAHAHAHAHAH

Switzerland will be affected