Investing.com - Global pharmaceutical stocks were mixed Monday after U.S. President Donald Trump signed an executive order aimed at reducing prescription drug prices in the United States by between 30%-80%.
The policy, known as "most favored nation" pricing, would align U.S. drug costs with those of other high-income countries, Trump said in a social media post on Sunday. This could potentially impact the profitability of European and Asian drugmakers heavily reliant on the U.S. market, where consumers currently pay almost three times more for many prescription drugs than other wealthy nations.
In a Truth Social post on Monday, Trump wrote: "DRUG PRICES TO BE CUT BY 59%, PLUS! Gasoline, Energy, Groceries, and all other costs, DOWN. NO INFLATION!!!"
"Starting today, the United States will no longer subsidize the healthcare of foreign countries... and we’ll no longer tolerate profiteering and price gouging from Big Pharma," Trump said in a press conference Monday morning.
Trump stated that while the U.S. has less than 5% of the world’s population, 75% of drug companies’ revenue comes from the U.S.
The President explicitly called out the weight loss drug makers for charging significantly more in the U.S. than in other nations. "Ozempic costs 10 times more in the U.S.," he said.
Ozempic and Wegovy are manufactured by Novo Nordisk (CSE:NOVOb) (NYSE:NVO), and Zebound is made by Eli Lilly (NYSE:LLY). Novo shares fell 1%, and Eli Lilly traded flat. Both traded up from session lows.
"It’s not clear whether the order will apply to all government purchases [...] or just some [...] and it is likely to encounter a lot of legal and political opposition, but the move is aggressive and negative for the pharma/biotech industry," analysts at Vital Knowledge said in a note to clients.
U.S. drugmakers traded higher despite opening lower, as the news was well telegraphed. Bristol-Myers Squibb Company (NYSE:BMY), Pfizer (NYSE:PFE), and Merck & Company Inc (NYSE:MRK) traded up between 2-4% shortly after the U.S. open.
In Europe, shares in Novo Nordisk (CSE:NOVOb) (NYSE:NVO), AstraZeneca (LON:AZN) (NASDAQ:AZN), GSK (LON:GSK) and Roche (SIX:ROG) all recovered early losses.
Japanese pharmaceutical companies experienced significant declines, with sector majors Takeda Pharmaceutical (TYO:4502) and Astellas Pharma (TYO:4503) falling by 5.5% and 3.9%, respectively.
South Korea’s Samsung (KS:005930) Biologics (KS:207940) and Hanmi Pharm Co (KS:128940) saw their shares drop by 4.7% and 0.7%, respectively.
Chinese pharmaceutical companies also faced pressure, with Zhejiang Hisun Pharmaceutical Co Ltd (SS:600267) falling 0.7%.
In Australia, CSL Ltd (ASX:CSL), a leading blood plasma and vaccine producer, fell 1.7%, while Clinuvel Pharmaceuticals Ltd (ASX:CUV) lost 3%, echoing regional sentiment.
Medicine giant Sun Pharma (NSE:SUN) in India, meanwhile, declined by 3.3%.
(Ayushman Ojha and Scott Kanowsky contributed to the reporting.)