Belgium's deputy prime minister has called on the European Union to ready its Anti-Coercion Instrument, the so-called 'trade bazooka,' for use against Washington over its push to raise EU drug prices, in a position paper published Thursday. Frank Vandenbroucke, who also serves as Belgium's health minister, co-authored the paper for the Egmont Institute think tank with deputy head of cabinet Gloria Ghéquière.
The call comes as the Trump administration pressures European governments to pay more for medicines under its 'most-favored-nation' policy. Washington argues that Americans are unfairly shouldering the costs of pharmaceutical research and development while Europeans reap the benefits. The policy ties US drug prices to the lowest prices charged in a basket of wealthy countries, including France, Germany and Italy.
Vandenbroucke also said the EU should be ready to suspend tariff concessions granted to Washington under the Turnberry trade deal from August 2025 if the US imposes additional duties on European goods.
The US has already concluded MFN pricing agreements with 26 pharmaceutical companies, which have agreed to benchmark the prices of drugs they supply to the US Medicaid program. The intended effect is for manufacturers to either increase prices in third countries, lower their US prices, or both. Washington is also increasing pressure on individual member states: in June, the US launched a Section 301 investigation into Germany's alleged 'persistent underpayment' for innovative drugs. That investigation could lead to additional tariffs exceeding the 15% ceiling agreed under Turnberry.
European capitals are banding together in response. At an informal meeting in Dublin last week, ministers from Ireland, France, Germany, Italy, Denmark, Sweden, the Netherlands and Belgium discussed creating an EU-wide pharmaceutical task force to coordinate their response. "If we don't work together and act as a team, countries are inevitably tempted to go it alone," French Trade Minister Nicolas Forissier told POLITICO.
In the paper, Vandenbroucke and Ghéquière argue that Brussels should open an ACI investigation in response to Washington's drug pricing policy. The instrument allows the EU to impose tariffs and restrictions on services in response to foreign threats to trade if backed by a qualified majority of member countries. "The procedure is quite heavy, but already opening an examination would have an effect of its own," the paper argues.
The authors also highlight a clause in Pfizer's MFN agreement that requires the company to share additional revenue from higher prices outside the US with the American government. "Higher foreign payments thus become a source of revenue for the American government itself," they write.
Vandenbroucke, an economist by training, questioned the underlying basis of the US policy. Because the US market is so lucrative compared with all others, he argued, drugmakers would accept withdrawing from third countries as long as it meant keeping US prices high. The net effect would likely be an extreme increase in European drug prices, or the withdrawal of drugs from the market, while producing comparatively modest price cuts in the US. According to one forecast cited in the paper, prices could triple in countries used as benchmarks, while US prices would fall by just 7.5% to 15%. "The consequences would reach well beyond the medicines budget, putting pressure on the solidarity that universal insurance is designed to secure," the authors write.
Analysis
Why This Matters
- The dispute could escalate into a full transatlantic trade confrontation: an EU investigation under the Anti-Coercion Instrument could lead to tariffs and restrictions on US services, and Washington could respond with duties above the Turnberry ceiling.
- European drug prices and availability are directly at stake: the paper's forecast says benchmark-country prices could triple, or medicines could be withdrawn from the market, while US prices would fall only modestly.
- The episode tests whether the EU can respond collectively, with eight countries already discussing a joint pharmaceutical task force to counter US pressure.
Background
The Anti-Coercion Instrument is the EU's mechanism for responding to economic coercion by trading partners, allowing it to impose tariffs and restrictions on services. The Turnberry trade deal, concluded in August 2025, governs transatlantic trade relations and set a 15% cap on US tariffs on European goods. Washington's 'most-favored-nation' policy is part of its push to lower US drug prices by benchmarking them against the lowest prices charged in wealthy countries.
Key Perspectives
Frank Vandenbroucke and Gloria Ghéquière: Say the EU should open an ACI investigation and be ready to suspend Turnberry tariff concessions; they argue the US policy could triple European drug prices or push medicines off the market.
The Trump administration: Argues Americans are unfairly shouldering the costs of pharmaceutical research and development while Europeans reap the benefits; its MFN policy is intended to bring US drug prices into line with other wealthy countries.
Nicolas Forissier: Says EU countries must work together as a team, or they will be tempted to go it alone.
What to Watch
- Whether the European Commission acts on the call to open an ACI investigation; even starting an examination could have a deterrent effect, the paper argues.
- How Washington follows through on its Section 301 investigation into Germany, which could lead to additional tariffs exceeding the Turnberry ceiling.
- Whether the Dublin group of eight countries agrees to form an EU-wide pharmaceutical task force to coordinate their response.
Checked
12 claims in this story checked against 1 source: 12 supported.
Show each claim
- SupportedBelgium’s deputy prime minister urged the EU to ready its Anti-Coercion Instrument, or “trade bazooka,” for use against Washington over its push to raise EU drug prices.Politico Europe: “The European Union should ready its Anti-Coercion Instrument, otherwise known as its “trade bazooka,” for use against Washington over its push to raise EU drug prices, Belgium’s deputy prime minister has said.”
- SupportedA forecast cited in the paper said prices could triple in benchmark countries while US prices would fall by 7.5% to 15%.Politico Europe: “According to one forecast cited in the paper, prices could triple in countries used as benchmarks, while U.S. prices would fall by just 7.5% to 15%.”
- SupportedFrank Vandenbroucke is Belgium’s deputy prime minister and health minister, and co-authored the position paper with Gloria Ghéquière.Politico Europe: “Frank Vandenbroucke, who also serves as the country’s health minister, issued the call in a position paper published Thursday by the Egmont Institute think tank, co-authored with his deputy head of cabinet Gloria Ghéquière.”
- SupportedVandenbroucke said the EU should be ready to suspend Turnberry tariff concessions if the US imposes additional duties on European goods.Politico Europe: “He also said the EU should be ready to suspend the tariff concessions it granted to Washington under the Turnberry trade deal from August 2025 if the U.S. imposes additional duties on European goods.”
- SupportedThe US had concluded MFN pricing agreements with 26 pharmaceutical companies.Politico Europe: “The U.S. has already concluded MFN pricing agreements with 26 pharma companies , which have agreed to benchmark the prices of drugs supplied to the U.S. Medicaid program.”
- SupportedIn June, the US launched a Section 301 investigation into Germany’s alleged persistent underpayment for innovative drugs.Politico Europe: “In June, the U.S. launched a so-called Section 301 investigation into Germany’s alleged “persistent underpayment” for innovative drugs.”
- SupportedMinisters from Ireland, France, Germany, Italy, Denmark, Sweden, the Netherlands and Belgium discussed an EU-wide pharmaceutical task force at an informal meeting in Dublin last week.Politico Europe: “At an informal meeting in Dublin last week, ministers from Ireland, France, Germany, Italy, Denmark, Sweden, the Netherlands and Belgium discussed creating an EU-wide pharmaceutical task force to coordinate their response.”
- SupportedNicolas Forissier told POLITICO, “If we don't work together and act as a team, countries are inevitably tempted to go it alone.”Politico Europe: ““If we don’t work together and act as a team, countries are inevitably tempted to go it alone,” French Trade Minister Nicolas Forissier told POLITICO .”
- SupportedThe paper says opening an examination would have an effect of its own despite the procedure being quite heavy.Politico Europe: ““The procedure is quite heavy, but already opening an examination would have an effect of its own,” the paper argues.”
- SupportedThe authors wrote that higher foreign payments become a source of revenue for the American government.Politico Europe: ““Higher foreign payments thus become a source of revenue for the American government itself,” they write.”
- SupportedThe authors wrote that the policy’s consequences could put pressure on the solidarity underpinning universal insurance.Politico Europe: ““The consequences would reach well beyond the medicines budget, putting pressure on the solidarity that universal insurance is designed to secure,” the authors write.”
- SupportedThe MFN policy ties American drug prices to the lowest prices charged in a basket of wealthy countries, including France, Germany and Italy.Politico Europe: “The MFN policy ties American drug prices to the lowest prices charged in a basket of wealthy countries, including France, Germany and Italy.”