Trump's Bold Move: Tackling Drug Prices with Global Price Parity
U.S. President Donald Trump has signed an executive order directing drugmakers to lower prices in line with international levels. While this move aims to reduce prescription drug costs, analysts question its implementation. The order has revived market confidence, as major pharmaceutical shares rose despite potential legal challenges and industry objections.
On Monday, President Donald Trump signed an executive order meant to slash the cost of prescription drugs in the United States by aligning prices with those in other developed nations. The move aims to fulfill a campaign promise, but experts foresee implementation challenges. Investors remain skeptical, yet market shares for major drugmakers rose in response to the order.
The ambitious order gives drugmakers 30 days to adjust prices, failing which the government threatens tariffs and potential rulemaking to further reduce costs. Importation of cheaper drugs and other measures are also on the table, despite industry criticism labeling these initiatives as harmful to American innovation.
Amid legal hurdles, the administration hopes the Federal Trade Commission will target anticompetitive practices. Significant market reaction followed, with shares of Merck, Pfizer, and Gilead Sciences rallying. However, critics argue the order lacks clear implementation plans, suggesting future litigation if enforced directly.
(With inputs from agencies.)
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