Trump threatens to take real action on U.S. drug prices, claiming to reduce drug prices by 1500%, causing a drop in the U.S. pharmaceutical sector
U.S. President Trump claimed on Monday that he would cut U.S. drug prices by up to 1400% to 1500%, emphasizing that "we will take real action on drug costs." He warned that he would address the cost figures of U.S. drug prices and would soon impose tariffs on pharmaceuticals. These remarks triggered a plunge in the U.S. stock market's healthcare sector, with the S&P 500 healthcare sector briefly falling over 1.3%, and the stock prices of several pharmaceutical giants plummeting
U.S. President Donald Trump stated on August 25 that he would reduce drug prices by 1400% to 1500%.
Media reports confirm once again the White House's tough stance on drug pricing issues. He stated at a briefing:
“We will take serious action on the cost of drugs in America.”
He also mentioned that he would address the cost figures of U.S. drug prices and quickly impose tariffs on pharmaceuticals.
After Trump's speech, the healthcare sector of the S&P 500 index fell over 1.3%, hitting a daily low. Component stock DexCom dropped over 6.6%, Moderna fell by more than 5.6%, while Align Technology, Pfizer, Cooper Companies, Merck, Becton, Dickinson and Company, and Regeneron Pharmaceuticals all fell over 2%. Amgen and Bristol Myers Squibb dropped over 1%, and Abbott Laboratories and Johnson & Johnson fell at least 0.3%.
The Nasdaq Biotechnology Index fell 1.57%, with component stock Sarepta Therapeutics dropping over 8%, Iovance Biotherapeutics briefly down 5.76%, and Entrada Therapeutics falling over 6%.
About a month ago, Trump sent letters to several large pharmaceutical companies. These companies included Johnson & Johnson, Pfizer, AstraZeneca, Bristol Myers Squibb, GlaxoSmithKline, Merck, Novartis, Roche, and Sanofi.
Trump also set a deadline of September 29 in the letter, demanding these companies lower drug prices and provide "Most-Favored-Nation" (MFN) pricing to all Medicaid patients, which requires drug companies to offer the same lowest prices they provide in other countries worldwide.
Trump wrote in the letter:
“You must provide the full range of existing drugs at the Most-Favored-Nation price for every Medicaid patient.”
He warned that if these companies do not comply, his administration would “use all means in our arsenal to protect American families from the continued abuse of drug pricing.”
According to CCTV News, on August 5 local time, Trump stated in an interview with CNBC that, The United States will first impose a "small tariff" on imported pharmaceuticals and will increase the tax rate within about a year.
He stated:
"In one year, at most one and a half years, the tax rate will rise to 150%, and then to 250%, because we want drugs to be produced in our country."
However, he did not disclose what the initial tariff rate on pharmaceuticals would be. Additionally, U.S. Treasury Secretary Scott Bessent previously stated in a media interview that the U.S. could impose tariffs on pharmaceuticals and suggested "keeping an eye on this area." White House trade advisor Peter Navarro also indicated that the Trump administration might impose tariffs on drug imports under Section 232 of the Trade Expansion Act of 1962.
Media reports suggest that this move is part of a series of measures by Trump to bring pharmaceutical manufacturing back to the United States. He has repeatedly emphasized reducing reliance on other countries in the global healthcare supply chain while alleviating the economic burden on American families by lowering prescription drug costs. This may also be part of a broader healthcare policy agenda by Trump aimed at reducing overall drug prices
