GSK and Astrazeneca shares slump as Trump vows drug price cut
Shares in London-listed drugmakers GSK and Astrazeneca tumbled on Monday morning after President Donald Trump said the US’ new pharma policy would make drug prices “rise throughout the world”.
GSK slumped three per cent and Astrazeneca nearly four per cent as markets opened.
The President announced the new plans in his latest Truth Social tirade.
“I am pleased to announce that Tomorrow morning, in the White House, at 9:00 AM (14:00BST), I will be signing one of the most consequential Executive Orders in our Country’s history,” Trump wrote.
He said the executive order would adopt a “most favoured nation’s policy” where the US would match the price of the nation that pays the lowest.
Trump said prescription drug and pharmaceutical prices would reduce “almost immediately, by 30 per cent to 80 per cent”.
“Our Country will finally be treated fairly, and our citizens Healthcare Costs will be reduced by numbers never even thought of before.
“Additionally, on top of everything else, the United States will save TRILLIONS OF DOLLARS,” the President said.
UK braces for ‘pharmageddon’
Gabriel McKeown, Head of Macroeconomics at The Sad Rabbit Newsletter commented: “Trump’s late‑night Truth Social manifesto threatens to unleash a pharmageddon that could cost the NHS billions in extra medication costs, just as budgets are tightened.
“This is sadly not hyperbole but a fair reading of the proposed executive order, as this plan would peg US prices to the lowest charged in any peer economy.”
Trump began floating the idea of pharma tariffs in the fallout of his ‘Liberation Day’ levies – where the President announced sweeping tariffs on the US’ trading partners.
UK Ambassador to the US Lord Peter Mandelson was reported to be “very focused” on securing an exemption for the UK, according to The Times.
FTSE 100 pharma giants have extensive activity in the US market and have been exempted from any levies so far.
For AstraZeneca, 43 per cent of 2024 revenues came from the American market.
David Belle, Founder and Trader at Fink Money commented: “This could be pretty big for the UK, especially the FTSE, considering AstraZeneca is 7.7 per cent and GlaxoSmithKline about 2.6 per cent of the FTSE 100 weight.”
Trump claimed firms would defend the pricing of prescription drugs and pharmaceuticals by saying it was “research and development costs”.
But, the President said “all of these costs were, and would be, for no reason whatsoever, borne by the “suckers” of America, ALONE.”