Trump signals an executive order to slash drug prices, causing a sharp sell-off in Asian pharmaceutical stocks. Major companies like Johnson & Johnson, Pfizer, and Abbott could be hit hard.
On Sunday, May 11 (U.S. Eastern Time), President Donald Trump announced that he would sign an executive order on Monday, May 12, aimed at lowering U.S. prescription drug prices by 30% to 80%, aligning them with the lowest global prices.
Posting on Truth Social, Trump criticized the high cost of prescription medications in the U.S., stating: "The prices of prescription drugs in America are 5 to 10 times higher than in other countries. These medications may have different prices, but they are the same drugs, produced by the same laboratories, factories, and companies."
To address these discrepancies, Trump vowed to implement a Most Favored Nation (MFN) policy, ensuring that U.S. drug prices match those of the lowest-priced countries worldwide. He added: "Our country will finally be treated fairly, and our citizens’ medical costs will be reduced like never before."
Global Market Impact
Following the announcement, Asian pharmaceutical stocks plunged on Monday:
Japan: Takeda Pharmaceutical (TYO:4502) fell 4.5%, Astellas Pharma (TYO:4503) dropped 3.8%.
South Korea: Samsung Biologics (KS:207940) lost 4.2%, Hanmi Pharmaceutical (KS:128940) declined 2%.
China: Biotech firm Maiwei Biotech plummeted 14%, Sino Biopharm slid over 6%.
Potential Fallout for U.S. Pharma Stocks
Investor fears in Asian markets suggest a broader sell-off could spill into U.S. markets, with pharmaceutical giants like Johnson & Johnson (JNJ), Pfizer (PFE), Abbott (ABT), and Novo Nordisk (NVO) potentially facing severe downturns.
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