People in Europe pay different prices for medicines depending on their country, but overall they spend much less than Americans. This pricing gap is now at the center of political debate in the United States.
Former US President Donald Trump recently said that the US should copy the way Europe handles drug prices. He called for the US to pay no more than the lowest price paid by other wealthy nations. Trump said this would help reduce the high cost of prescription drugs in America. He suggested that if pharmaceutical companies do not lower their prices, the US should tie its prices to those paid in Europe and similar countries. However, this idea has not yet become official policy, and it remains unclear how or when it might be put in place.
Drug spending in the United States is much higher than in Europe. In 2022, Americans spent about $617.2 billion (€542.7 billion) on medicines. In comparison, 24 European countries together spent only $233.5 billion (€205.3 billion), according to a study by the RAND Corporation. This means the US pays more than twice as much even though it has a smaller population than all of Europe combined.
One reason for the high US prices is that drug companies often point to research and development costs. They say these expenses must be covered through higher prices. But in Europe, governments negotiate directly with drug firms to keep prices down. They also compare drug prices across countries to set fair payment levels. This strategy helps lower overall costs and makes medicines more affordable for people.
Still, not all Europeans pay the same amount for drugs. For example, people in Switzerland spend around €525 per person each year on medicines. In Croatia, the amount is about €262 per person. This big difference is partly due to secret deals between governments and pharmaceutical companies. These deals are not public and can lead to uneven pricing across the continent.
Experts in health policy say the lack of transparency is a serious problem. Each country in Europe uses its own methods to decide how much a drug should cost. Some countries, like England and Sweden, focus on whether the drug is cost-effective. Others, like Germany, look at whether the medicine offers more value than treatments already on the market.
In recent years, drug costs have continued to rise across Europe. In Germany, for example, hospital drug spending rose by 11.5 percent between 2012 and 2022. Retail pharmacy prices also went up by 2.6 percent during that time. Insurance providers now warn that these rising costs are putting heavy pressure on national health budgets. If the trend continues, some health systems may struggle to pay for the treatments their people need.
Public health budgets in many European countries are already under stress. If drug prices go up further—because of global demand or new US policies—some nations may be forced to reduce services or delay access to care.
Who pays for medicine also varies across Europe. In most countries, the public health system covers a large share of the cost. But in some places, patients must pay part of the bill themselves or use private insurance. In the Baltic states, for instance, prices for the same drug can change based on the illness being treated. Estonia, Poland, and France use prescription fees or flat co-payments. Cyprus covered 90 percent of all drug costs through public funding in 2022. Bulgaria covered only 23 percent.
Health policy experts warn that many healthcare systems in Europe cannot take on much more financial pressure. If drug costs rise sharply, these systems could face serious problems in delivering care.
The United States and Europe face different challenges, but the goal is the same—making sure people can afford the medicines they need. With rising costs on both sides of the Atlantic, the future of healthcare budgets depends on smarter pricing strategies and better cooperation between governments and drug companies.
