Global pharmaceutical companies, facing pressure from European governments to cut drug prices, are increasingly turning to a tried-and-tested tactic: threatening to pull investment and scale back expansion plans. The strategy has already paid off in Britain. GxP News looks at which other countries, which companies and why have cut or plan to cut their investments.

Europe’s problems have been exacerbated by Donald Trump’s policies. The former US president made considerable efforts to link US prescription drug prices to lower prices in other countries, including Europe. The outcome was that major pharmaceutical companies struck deals with the White House to cut drug prices in exchange for tariff exemptions, which inevitably increased pressure on prices in other regions.

In recent years, drug spending in Germany, one of Europe’s largest markets, has lagged behind the United States and Japan. In 2023, Germany spent 1.6% of GDP on pharmaceuticals, compared with 2.1% in the US, 1.9% in Japan and 1.7% in Canada. Among European countries, Germany’s share is the highest. Britain, for example, spent just 1.1% of GDP on drugs in 2023.

Germany is currently debating a bill to tighten drug spending. US-based Pfizer has already warned Chancellor Olaf Scholz that its investments in the country are under threat because of drug pricing policy. Another US-headquartered company, Eli Lilly, announced in early June that it would halve its planned €2.3 billion ($2.7 billion) investment. German drugmaker Boehringer Ingelheim also said it was scrapping €900 million in expansion plans. Both cited the proposed legislation as the reason. British‑Swedish AstraZeneca said it would not launch new drugs in Germany if spending is cut.

Germany’s health ministry said during the week of 15-21 June 2026 that no decisions had yet been made and declined further comment on any discussions.

However, Reuters reported on 15 June, citing a German government source, that Berlin would scrap part of the plan opposed by the industry, replacing a variable discount mechanism with a fixed one to avoid an investment slump. Industry representatives are convinced the concessions will not solve Germany’s pricing problems. They will continue to fight for their interests as the proposed law is set to be debated in parliament in the coming months.

Some drugmakers decided to cut investments in German plants following their experience in Britain. There, they struck a deal granting British drugs tariff-free access to the US market in exchange for higher prices for new medicines. Washington imposed zero tariffs on British drugs for at least three years. Pharmaceutical products account for about one-fifth of Britain’s goods exports to the US by value.

In addition, Britain committed to increase drug spending from 0.3% of GDP to 0.35% by 2028 and to 0.6% by 2035. Under the agreement, the country was also required to raise the net price paid by the National Health Service for new drugs by 25% from April 2026. The increase will apply to drugs launched after the agreement takes effect.

ING bank analyst Diederik Stadig said drugmakers acted more strategically in Britain, even though the situations are similar.

“The German government said it wanted to reform pricing. Industry representatives responded: ‘Great, but that will affect our return on investment’,” he said.

Tariffs, US pricing policy, China’s growing influence and the profitability of the American market are all making Europe less attractive, and drugmakers are letting the EU know it, Stadig noted.

Britain and Germany are not the only countries caught in the crossfire between drugmakers and governments.

In France, the national health authority in April accused drugmakers of using “coercive pressure” to influence clinical assessments, including threats to pull drugs from the market.

Dutch biotech lobby group HollandBio said its members are becoming increasingly cautious when applying for reimbursement, and the country risks slipping further down the priority list for drug launches.

Separately, US-based Amgen withdrew its cholesterol drug Repatha from sale in Denmark, citing pricing and “changing economic circumstances.”