A day after announcing the new US pharmaceutical policy, US President Donald Trump said that the US government is cutting prescription medicine prices by 59 percent.
President Trump declared his intention to issue an executive order that will lower the cost of prescription drugs in the US immediately.
Ina post on X, Trump said, “I will be instituting a MOST FAVOURED NATION'S POLICY whereby the US will pay the same price as the Nation that pays the lowest price anywhere in the World.”
Before the formal start of trading in New York, shares of US pharmaceutical companies fell, with Merck & Co. Inc., Pfizer Inc., Bristol-Myers Squibb Co., and Eli Lilly & Co. all experiencing declines. In Asia, the pharmaceuticals segment in Japan's Topix Index saw its largest one-day loss since August, while European pharmaceutical companies Novo Nordisk A/S, Sanofi SA, and AstraZeneca Plc fell, missing out on a wider market gain.
The Inflation Reduction Act, passed in 2022 under former President Joe Biden, allows the US government to negotiate prices for some of the most expensive medications used in Medicare health insurance, and more are expected to be added annually.
Physician-administered medications have not been included in the first two rounds of drug price talks, but they may be in the upcoming round.
Investors said they want more details about the possible price policy constraints when Trump releases his executive order on Monday at 9 a.m. Whether it would only apply to government programs like Medicare or Medicaid, whether it would only apply to specific medications or prescription classes, or whether the White House sees a way to apply this more widely are some of the questions raised.
Trump's March statement on X that the greatest approach to lower US medicine prices "is to make it illegal for drug companies to sell the same drugs abroad for lower prices than they sell them for here" may have served as inspiration, according to billionaire hedge fund manager Bill Ackman.
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Drug companies contested the initiative in federal court, arguing that the administration had improperly conducted the regulation process. The Biden administration pushed legislation that resulted in the Inflation Reduction Act rather than appealing that decision.