“We are currently reviewing the letter” sent by Trump asking for price drops, said Novartis.
Keystone / Gaetan Bally
US President Donald Trump says he has sent letters to 17 major pharmaceutical companies – including Swiss giant Novartis – calling for immediate measures to lower drug prices in the United States. Otherwise, they will face retaliatory measures.
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In letters addressed personally to the company CEOs, Trump gave the firms a deadline of 60 days. “He has signed 17 letters to the pharmaceutical companies,” White House spokesperson Karoline Leavitt told the press in Washington on Thursday, reading out the letter to Eli Lilly CEO David Ricks as an example.
Trump then published all the letters on his Truth Social platform. In addition to Novartis, they were also sent to Merck, Pfizer, AstraZeneca, Novo Nordisk and Sanofi, among others.
“We are currently reviewing the letter,” Novartis wrote in response to a request from the AWP news agency. Roche also said it was reviewing the letter that Trump had published on social media.
‘All means at our disposal’
“If you refuse to act, we will use all means at our disposal to protect American families from excessive drug prices,” the largely identical letters stated. The companies have until 29 September to present “concrete commitments”.
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On May 12, Trump had already announced a plan to significantly reduce US drug prices, down to the level of other major economies. He had failed to deliver on this campaign promise during his first term.
“The prices of certain prescription drugs and pharmaceutical products will drop by 50 to 80 or 90% for Americans almost immediately,” Trump promised at the time. The main instrument for this would be negotiations with pharma companies, which had resisted price cuts in the past.
Pharmaceutical stocks come under pressure
Drug prices in the US are among the highest in the world and are significantly higher than prices in neighbouring countries and Europe. According to a study by the Rand Corporation, Americans pay on average 2.5 times as much for prescription drugs as Europeans, for example. Trump had announced his intention to reduce this gap.
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How drug prices are negotiated in Switzerland and beyond
After some pharmaceutical stocks in the US came under pressure on Thursday, numerous European stocks are now also falling. Among the biggest losers, with declines of more than 4% in some cases, are stocks such as Novo Nordisk, AstraZeneca, GSK and Merck. The two Swiss heavyweights Novartis and Roche will not be able to react until Monday, as the stock market is closed on Friday due to the national holiday.
Industry association Interpharma concerned
Analyst David Seigerman from BMO Capital Markets spoke of “shocking headlines” but expressed doubts as to whether the demands could be easily implemented. There are legal hurdles here. Richard Vosser from JPMorgan made a similar assessment.
Meanwhile, investment strategist Jurus Arthur from Oddo BHF estimates that Novartis, which is heavily dependent on the US market, could lose up to $800 million (CHF650 million) annually, and Roche as much as CHF1 billion.
According to the industry association Interpharma, the US government is jeopardising the global supply of innovative medicines. “This also affects research-based pharmaceutical companies in Switzerland and the supply of medicines in Switzerland,” the association said in a statement.
Translated from German with DeepL/gw
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