Novartis has released an open letter addressed to the world’s governments, urging them to take action in addressing the current state of geopolitical fragmentation that is accelerating along with the global economy, which is drifting deeper into a “G-Zero” world.

A G-Zero world, as described in the letter, is a world in which no country or group of countries are willing and or able to champion a shared international agenda (1).

The letter, co-authored by Eurasia Group, is a wide-ranging call to action, emphasizes urgency, and argues that life sciences now sit at the intersection of health security, economic competitiveness, and industrial policy, as nations increasingly prioritize unilateral strategies over multilateral coordination (1).

With US trade policy under President Donald Trump’s second term reshaping global incentives through tariffs, reshoring, and conditional market access, other countries are currently deciding whether to treat sectors such as pharmaceuticals as short-term bargaining chips or as foundational pillars deserving sustained structural reform.

The president’s decision includes the most-favored-nation policy, in which, back in May 2025, the president issued an executive order stating that pharmaceutical companies must treat the United States as a most-favored-nation in regard to drug pricing. The order states that domestic drug prices must either be equal to or less than the lowest price of the drug in other countries.

In September 2025, Trump revealed plans to impose 100% tariffs on branded and or patented pharmaceuticals, writing on Truth Social, “Starting October 1st, 2025, we will be imposing a 100% tariff on any branded or patented pharmaceutical product, unless a company is building their pharmaceutical manufacturing plant in America. ‘Is building’ will be defined as breaking ground and/or under construction. There will, therefore, be no tariff on these pharmaceutical products if construction has started. Thank you for attention to this matter!” (editor’s note: this quote has been edited for grammar and style from its original source) (2).

What are the details of the letter?

The letter warns that defensive measures, tariffs, budget caps, and regulatory divergence are proving insufficient without parallel investments in innovation and predictable policy frameworks, pulling examples from Singapore, South Korea, China, and the US, highlighting how countries that reward intellectual property, streamline regulation, and commit capital are pulling ahead in R&D, manufacturing, and patient access, while others risk falling behind (1).

From the perspective of the pharmaceutical industry, blunt cost-containment tools such as claw backs and external reference pricing are undermining competitiveness, deterring launches, and spreading productivity gaps.

In the letter, the authors propose several policies to “enhance sciences competitiveness,” including:

• remove barriers preventing the life sciences sector from setting prices fully valuing innovative medicines at regulatory approval
• commit to higher investments in innovative medicines as a percentage of gross domestic product (GDP)
• remove or mitigate practices reducing top-down value of medicines.

The letter’s authors continue to urge global governments to pivot toward long-term strategies that value innovation, increase investment in medicines as a share of GDP, and position life sciences as a core economic engine, arguing that in an ever increasing leaderless global order, countries that move decisively in 2026 will secure both healthier populations and lasting economic advantage (1).

Resources

1. Novartis. Letter to Global Governments: A Call for Bold Life Sciences Investment. Company Statement. Jan. 15, 2026. https://www.novartis.com/news/letter-global-governments-call-bold-life-sciences-investment
2. Trump, D. President Donald Trump Truth Social. Truth Social. Sept. 25, 2025. https://truthsocial.com/@realDonaldTrump/posts/115267512131958759