The Trump Administration’s impact on global pharmaceuticals

The presidency of Donald Trump has had a significant effect on the global pharmaceutical sector. His administration’s policy framework,  characterised by protectionist trade measures, corporate tax reform and a reinforced “America First” industrial agenda,  has reshaped how multinational drug‑manufacturers operate both domestically and internationally.

Prior to 2016, the U.S. pharmaceutical market largely functioned on a free-market basis with minimal government price controls. Manufacturers set drug prices, and federal programmes such as Medicare were largely prohibited from negotiating prices for many drugs. This environment encouraged strong profitability but drew growing public criticism regarding affordability.

Under the Trump Administration, new initiatives emerged to lower drug costs in the U.S. and strengthen domestic production. For example, in May 2025 Trump signed an executive order introducing a “Most‑Favoured‑Nation” (MFN) pricing model, directing U.S. prices to be aligned with the lowest prices paid in comparable developed countries. At the same time, the administration pushed for reshoring of pharmaceutical manufacturing, citing supply‑chain resilience and national-security concerns. Tariff threats and import controls have added pressure for companies to locate more production within the U.S.

In addition, TrumpRx has been established as a federal initiative in collaboration with Pfizer to provide discounted access to select prescription medicines in the U.S. The programme, scheduled for launch in early 2026, allows patients to purchase certain drugs directly at lower prices, while aligning with MFN pricing principles. This represents a concrete example of the administration’s approach to linking corporate incentives with drug-cost reforms.

These policies have had global ripple-effects. In the UK, the life sciences clusters around Oxford, Cambridge and London have remained attractive for investment from U.S. and global pharmaceutical firms. At the same time, U.S. pricing pressures have prompted some companies to review their international pricing strategies, raising potential challenges for health systems such as the NHS and other European bodies.

Meanwhile, consolidation remains a major strategic response for the industry. Recent major deals, such as Sanofi S.A.’s acquisition of Blueprint Medicines (June 2025) and Merck & Co.’s planned acquisition of Verona Pharma (July 2025), illustrate how pharmaceutical companies continue to pursue consolidation and strategic growth in response to U.S. pricing reforms and supply‑chain pressures. In times of regulatory or policy uncertainty, consolidation becomes not only a growth strategy but a means of survival.

Looking ahead, U.S. policy‑driven localisation and pricing reform are set to continue shaping global pharmaceutical investment. For UK life sciences, this presents a two‑fold opportunity: attracting foreign capital seeking stable regulatory regimes, while simultaneously managing heightened cost and supply‑chain pressures across an increasingly interconnected global market.