STOCKS IN FOCUS: Pharmaceutical stocks slide - Trump puts pressure on the industry

ZURICH/LONDON/PARIS (dpa-AFX) - Pharmaceutical stocks came under severe pressure on Monday due to concerns about profitability in the US business. US President Donald Trump wants to lower prescription drug prices in the US, thus targeting the entire industry.

On Monday, the Republican announced on his online platform Truth Social that one of the "most consequential executive orders" in US history would be signed. He had previously written there that he would make "one of the most important" announcements ever. Last week, Trump already promised a "world-shattering" announcement. US media had already speculated that it might concern drug prices.

The prospect that Trump is now serious put severe pressure on international pharmaceutical stocks on Monday: The losses are likely to extend beyond Japan and Europe to the US stock exchanges. Sanofi and Novo Nordisk were hit particularly hard in European trading, with declines of almost six percent. Shares of AstraZeneca and GSK fell by as much as four percent in London. Roche and Novartis lost as much as three percent in Zurich. Pfizer traded down 2.3 percent in premarket trading in New York.

Trump wants to force pharmaceutical companies to accept internationally comparable prices. He sees his country as disadvantaged because of high prices. In the United States, there is no centralized government price regulation that applies to all pharmaceuticals. The pharmaceutical industry plays the most significant role in determining how much a drug costs – government influence is limited. This leads to sometimes extremely high prices – by international comparison, many drugs are significantly more expensive in the United States.

The world is wondering why prescription drugs are so much more expensive in the US than in other countries, even though they are manufactured in the same lab by the same company, Trump wrote. He promised that drug prices in the US would drop by 30 to 80 percent "almost immediately." "Prices around the world will rise to create balance and—for the first time in many years—bring justice to America!"

Trump wants to ensure that certain prescription drugs are not paid more in the US than in other countries. It is unclear whether this only applies to drugs covered by the government-sponsored health insurance program for seniors (Medicare) or whether Trump wants to go a step further with price regulation. This could be particularly difficult legally, but pharmaceutical companies are likely to oppose the plan anyway./tih/la/jha/

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