Trump’s promise to cut US drug prices sends shockwaves in Asian markets

President Donald Trump said Sunday night that he will sign an executive order on Monday to cut the cost of prescription drugs in the United States, shaking a powerful industry and jolting stock markets in Asia.

Posting on Truth Social, the president vowed that the order, due at 9 a.m. in Washington on May 13, would slash prices “almost immediately by 30 per cent to 80 per cent.” He said the policy would create a “most favoured nation” rule so America never pays more than whichever country gets the lowest price for the same medicine.

A similar idea stalled during Trump’s first term after fierce pushback from drug makers. This time he said that he is ready to confront them. “Campaign contributions can do wonders, but not with me, and not with the Republican Party,” he wrote. “We are going to do the right thing, something that the Democrats have fought for many years.”

Industry lobby group PhRMA, which led the earlier resistance, did not respond to comment requests by The Financial Times. The group has long argued that price caps would drain money from research.

Trump addressed the claim directly, writing that companies “would say, for years, that it was research and development costs, and that all of these costs were, and would be, for no reason whatsoever, borne by the ‘suckers’ of America, ALONE.” He said the new order means the country will “finally be treated fairly.”

Republican leaders who favor a lighter regulatory approach have not yet responded publicly, but several senior lawmakers opposed the earlier proposal when it surfaced in 2020.

Shock waves spread through Asian pharma markets

Shares in Japanese drugmaker Chugai Pharmaceutical Co. fell as much as 7.2% in early trading on Monday, their steepest slide in a month. 

Daiichi Sankyo Co. and Takeda Pharmaceutical Co. each lost about 5%. In South Korea, SK Biopharmaceuticals Co., Celltrion Inc. and Samsung Biologics Co. all dropped more than 3%.

Analyst Hidemaru Yamaguchi at Citigroup Global Markets Japan Inc. said in a note that, although the legal path is “questionable,” the announcement is negative for the whole sector. 

Firms that depend on the United States for a big share of revenue—such as Takeda, Astellas Pharma Inc. and Otsuka Holdings Co.—are especially exposed, he added. Shares of Astellas and Otsuka also traded lower.

Investors worry that any American move to squeeze prices could prompt tougher talks in other countries and shrink profit margins. The concern surfaces as many drug makers rely on U.S. sales to fund high-cost trials for cancer and next-generation therapies.

The White House has not released the full text of the order. Executives and lobbyists are expected to study the language once it is published to see whether it can be challenged in court. 

For now, both Wall Street and health-care watchers are waiting to see if Monday’s signing sets off a long legal fight—or a quick gain for shoppers at the pharmacy counter, for everyday American families.

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