*

Trump administration sought drugmaker input on boosting

drug

prices abroad

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White House offered to back drugmakers' global price talks

if

they lowered U.S. drug prices

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A White House official described the talks with drugmakers

as

collaborative

By Patrick Wingrove and Maggie Fick

NEW YORK, Aug 7 (Reuters) - The Trump administration has

been talking to drugmakers about ways to raise prices of

medicines in Europe and elsewhere in order to cut drug costs in

the United States, according to a White House official and three

pharmaceutical industry sources.

U.S. officials told drug companies it would support their

international negotiations with governments if they adopt "most

favored nation" pricing under which U.S. drug costs match the

lower rates offered to other wealthy countries, the White House

official said.

The U.S. is currently negotiating bilateral trade deals and

setting tariff rates on the sector.

The Trump administration has asked some companies for ideas

on raising prices abroad, two of the sources said, describing

multiple meetings over several months aimed at lowering U.S.

prices without triggering cuts to research and development

spending drugmakers insist would result.

The White House official called the effort collaborative,

saying both sides were seeking advice from each other.

The U.S. pays more for prescription drugs than any other

country, often nearly three times as much as other developed

nations. President Donald Trump has repeatedly said he wants to

narrow this gap to stop Americans from being "ripped off."

The previously unreported discussions reflect the challenges

Trump faces to achieve that goal, and are the backdrop to the

letters he sent last week to CEOs of 17 major drugmakers, urging

them to cut U.S. prices to match those paid overseas.

Unlike in the U.S., where market forces determine drug

prices, European governments typically negotiate directly with

companies to set prices for their national healthcare systems.

Anna Kaltenboeck, a health economist at Verdant Research,

said European nations have leverage to drive pricing and are

sometimes willing to walk away from purchasing medicines they

deem too expensive.

Drugmakers generate most of their sales in the U.S. The

Pharmaceutical Research and Manufacturers of America - the

industry's main lobby group - has always argued that cutting

U.S. prices would stifle innovation by lowering R&D spending.

PhRMA declined to comment on the private meetings.

Kaltenboeck said past studies had shown that drugmakers made

enough money in the U.S. to more than fund their entire global

R&D spends.

"Prices can come down in the United States without being

increased in other countries, and we can still get innovation,"

she said.

TOP PRIORITY

Despite the Trump administration's tariff threats and

pressure to move more manufacturing to the U.S., the push to

raise European drug prices is its top priority in discussions

with industry, according to a senior executive at a European

drugmaker, who spoke on condition of anonymity about the

confidential meetings.

"This is the key conversation right now with PhRMA and every

company getting that message from Pennsylvania Avenue to a point

that we are already executing on it," the executive said,

referring to the White House address. The company had already

met with European governments on the issue, the executive added.

An E.U. Commission spokesperson said it is in regular

contact with the pharma industry and pointed to an agreement

with the U.S. that should it impose tariffs on pharmaceuticals,

they would be capped at 15%.

When asked how the administration would support

international drug price negotiations, the White House official

referred Reuters to Trump's most favored nation executive order

from May. That order directed trade officials to pursue trade

and legal action against countries keeping drug prices below

fair market value.

In last week's letters, Trump complained that since the

May executive order, most industry proposals had simply shifted

blame for high prices or requested policy changes that would

result in billions in industry handouts.

A second source, a pharmaceutical executive who was not

authorized to speak on the matter, said the Trump administration

has been continually meeting with representatives of his company

and had discussed strategies for raising drug prices

internationally.

"There's a big push from the administration to drive up

prices outside the U.S.," the executive said.

The executive said the Trump administration had been looking

at using trade talks with the UK and EU as leverage, and

considered pressuring countries to spend a higher percentage of

GDP on new medicines or offering tariff breaks in exchange for

higher drug spending.

It was understood that the UK deal specifically aims to

get the country to ramp up investment in branded medicines over

time, the executive said.

A spokesperson for the UK government said it would continue

to work closely with the U.S. and its own pharmaceutical

industry to understand the possible impact of any changes

to drug pricing, without commenting on the trade talks.

In April, over 30 industry CEOs including those from

AstraZeneca ( AZN ), Bayer and Novo Nordisk

signed a letter to European Union President Ursula

von der Leyen saying Europe needed to rethink its pricing

policies.

"It's going to be very difficult for a country that already

has the ability to control what it spends to go in the other

direction," Kaltenboeck said, "and it doesn't make much sense

for them politically."