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People in different parts of Europe pay different prices for the same medicines. These prices depend on the country they live in. However, when compared to the United States, Europeans spend far less on medicines. In 2022, the U.S. spent $617.2 billion (€542.7 billion) on drugs. Meanwhile, 24 European countries combined spent only $233.5 billion (€205.3 billion), according to data from the RAND Corporation.

The U.S. Aims to Follow Europe’s Lead on Drug Prices

Recently, former U.S. President Donald Trump criticized the European Union’s approach to drug pricing. During a press conference, he shared a plan to reduce medicine costs in the U.S. Trump said that Americans should eventually “pay what Europe pays.” He called the negotiations between European governments and drug companies “difficult,” “brutal,” and “nasty.” His plan suggests linking U.S. drug prices to the lowest prices paid by other wealthy countries unless drugmakers choose to lower their costs voluntarily.

Despite these strong words, many experts remain unsure how this plan will work in practice. It is unclear how much money it could save Americans or when such changes might happen.

Why Are U.S. Drug Prices So High?

Pharmaceutical companies often defend high prices in the U.S. by saying they need to recover the huge costs of creating new medicines. Research and development (R&D) for new drugs can be very expensive and take many years. Because Europe negotiates prices more strictly and the U.S. government usually avoids interfering in drug pricing, U.S. prices remain much higher.

A World Health Organization (WHO) report highlights that many European countries use international price comparisons to decide how much they will pay for medicines. This approach helps keep their costs lower.

Secret Deals Drive Price Differences Across Europe

Even though Europeans pay less overall, drug prices still vary a lot between countries. For example, Switzerland spends around €525 per person each year on medicines, while Croatia spends about €262 per person. This difference partly comes from secret negotiations between governments and drug companies.

These private deals mean prices are often not transparent. Some experts worry this secrecy could increase the cost of already expensive medicines.

“There’s very little visibility into the details of these negotiations,” said Huseyin Naci, a health policy expert at the London School of Economics, in an interview.

Countries Use Different Methods to Set Prices

Each European nation has its own rules for deciding how much to pay for medicines. England and Sweden focus on whether a drug is good value for money. Germany checks if a new medicine improves patient outcomes compared to existing treatments.

Over the last ten years, medicine costs have gone up across Europe. In Germany, hospital spending on drugs rose by 11.5 percent, and prices at pharmacies increased by 2.6 percent between 2012 and 2022.

Health Budgets Feel the Pressure

European health insurance providers have warned that rising drug costs are straining national health budgets. Naci explained that many countries already pay high prices for medicines given what their healthcare systems can afford.

He also cautioned that if U.S. policies or pharmaceutical companies push prices higher in Europe, it could threaten the financial stability of healthcare services.

Who Pays for Medicines in Europe?

In many European countries, public health systems pay most of the cost for medicines. But some patients still have to pay themselves or through private insurance.

In the Baltic states, the cost patients pay may depend on their illness, according to the WHO. Countries like Estonia, Poland, and France ask patients to pay prescription fees or fixed co-payments.

In Cyprus, public health programs covered 90 percent of all drug spending in 2022. In contrast, in Bulgaria, the public share was only 23 percent. These figures include all medicines, not just those prescribed by doctors.

Higher Prices Could Threaten Access and Fairness

Naci stressed that health systems across Europe have little room to absorb higher medicine prices. “Expecting these systems to handle even more expensive drugs leaves little flexibility,” he said.

If prices rise too much, some patients may not get access to needed treatments. This could increase health inequalities across Europe.

The Bigger Picture

This issue is part of a global debate about how to balance drug innovation, fair pricing, and access to medicines. The U.S. pays far more for drugs than Europe, yet the health outcomes do not always match this spending.

European countries continue to experiment with ways to negotiate better prices and ensure patients get affordable medicines. At the same time, the secretive nature of some price deals and the growing cost of drugs remain major concerns.

For Americans, the hope is that plans to link U.S. drug prices to international rates could bring relief. However, achieving this will require overcoming many political and industry hurdles.

Meanwhile, Europeans watch closely as their healthcare systems face new pressures from rising medicine costs and potential policy changes.