WASHINGTON: Shares of Pfizer increased approximately 5% following President Donald Trump’s announcement that the drugmaker will reduce prices for all its prescription drugs sold to the Medicaid insurance programme.
Trump stated that Pfizer will also introduce all new prescription drugs at a “most favoured nation” price during his Tuesday press conference.
The White House plans to launch a direct-to-consumer website named TrumpRx for Americans to purchase medications.
Pfizer will sell some of its drugs directly to consumers through this new website.
According to a poster displayed at the White House event, Pfizer will offer several medications on the website with significant discounts.
These medications include rheumatoid arthritis drug Xeljanz, migraine treatment Zavzpret, dermatitis drug Eucrisa, and post-menopausal osteoporosis medication Duavee.
Discounts on these drugs will range between 40% and 85% through the TrumpRx platform.
Trump added that other drug manufacturers will commit to similar agreements in the coming weeks.
Shares of other pharmaceutical companies including Merck, Eli Lilly, AbbVie, and Bristol Myers Squibb rose between 3% and 5%.
BMO Capital Markets analyst Evan Seigerman said the “most favoured nation” pricing and pharmaceutical tariffs have been sector concerns for some time.
Seigerman noted that today’s announcement appears to be reading positively in the market.
Trump sent letters to 17 leading drug companies in July demanding they slash drug prices to match overseas levels.
The president described this policy as “most favoured nation pricing” or MFN.
Drug companies were required to respond with binding commitments by September 29.
Pfizer has become the first company to announce such a deal with the administration.
Seigerman suggested today’s deal sets a path for other pharmaceutical players to follow.
This approach allows for headline pricing concessions and a political win for Trump without more punitive implementation of MFN or tariffs. – Reuters
