European drugmakers slip after Trump pressures industry over U.S. price cuts
Shares of major European pharmaceutical firms declined on Friday after U.S. President Donald Trump sent letters to 17 global drugmakers demanding they align U.S. prices with those offered in other countries. The move follows a sweeping executive order signed earlier this year aimed at curbing high drug costs in the United States.
Under the new directive, drugmakers are required to offer "most-favoured-nation" prices to all Medicaid beneficiaries and guarantee similar pricing for new medications. Companies have until September 29 to respond with binding commitments, News.Az reports, citing Reuters.
Pharma giants Novo Nordisk, Sanofi, AstraZeneca, GSK, and Merck KGaA saw shares fall between 1% and 4% in early Friday trading. Novo Nordisk, already under pressure after a 28% plunge earlier in the week due to a profit warning and CEO transition, hit a four-year low with a further 4% drop.
The broader European healthcare index (.SXDP) dropped 1.4% by 07:31 GMT, its lowest level since April.
Trump’s letters arrive amid ongoing uncertainty surrounding the U.S.-EU trade deal, which could expose pharmaceutical firms to tariffs costing $13–19 billion.
"This directive adds another layer of uncertainty for the pharmaceutical sector," said Vasu Menon, Managing Director of Investment Strategy at OCBC. “While there’s a deadline in place, Trump may soften his stance if companies show willingness to negotiate.”
American drugmakers including Pfizer, Johnson & Johnson, Eli Lilly, AbbVie, and Merck & Co. also received similar letters. Some have responded, expressing openness to engaging with the administration.
Despite the pressure, analysts and drug pricing experts say full compliance with Trump’s demands is unlikely. However, the political pressure could reshape the way companies approach pricing and distribution in the U.S. market.
In a sign of potential changes, Swiss drugmaker Roche recently announced it is considering selling prescription medicines directly to U.S. consumers to lower patient costs as part of ongoing talks with the government.
Meanwhile, U.S. stocks closed lower on Thursday, with the Dow down 0.75%, the S&P 500 down 0.35%, and the Nasdaq closing slightly in the red.
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