Newscasts - European drugmakers rattled over Trump letter on US price cuts

Merck KGaA

01/08/2025 13:35

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Source: 'Reuters - Business videos'

Description: Shares of European drugmakers slipped early on Friday (Aug 1) after U.S. President Donald Trump sent letters to major pharmaceutical firms to cut drug prices in the United States, months after signing a sweeping executive order aimed at lowering prices. Diane To reports.

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Video Transcript:

Shares of European drugmakers took another hit early on Friday. US President Donald Trump sent letters to major pharmaceutical firms telling them to cut drug prices in the United States. It comes after he signed a sweeping executive order aimed at lowering prices months ago. The industry was already grappling with tariffs outlined in the latest US-EU trade deal. Those could cost the European pharmaceuticals between $13 billion and $19 billion. In his letters, Trump pushed 17 companies to provide so-called "most-favored-nation prices" for patients of the government's Medicaid health program. Trump also wants them to guarantee such pricing for new drugs. They have until September 29 to respond with binding commitments to those terms. The news sent the European healthcare index falling in the morning to its lowest since April. One analyst told Reuters, it remains to be seen whether Trump will soften his stance if the drugmakers make an effort to engage with him. Several companies, including Pfizer and Merck KGaA's US division, said they were open to working with the Trump Administration. Though lobbyists and experts said it seemed unlikely that the pharmaceutical companies would comply with Trump's demand to lower US prices. The President's executive order in May directed drugmakers to drop medicine prices to align with what other countries pay.

Big pharma will either abide by this principle voluntarily.

It's led to some shifts in how drugmakers sell their medicines. Swiss pharmaceutical Roche said last week it may sell its prescription drugs in the US directly to consumers to lower costs for patients.