Despite the aggressive rhetoric, U.S. pharmaceutical stocks closed higher Monday, buoyed by optimism from the US-China trade truce and scepticism about the policy’s enforceability. Merck rose over 4%, with Pfizer and Amgen up more than 2%. European drugmakers fell initially but mostly recovered, with AstraZeneca and GSK both ending the day higher. Analysts attributed the muted reaction to uncertainty over whether the order will withstand legal and political scrutiny.
Some experts warn that rather than forcing global price convergence, drugmakers may simply withdraw products from low-margin overseas markets to preserve their U.S. profits, undermining the policy’s intent.
Industry analysts noted that the order’s lack of detail and reliance on future negotiations could limit its immediate impact. Jefferies and JPMorgan both flagged legal and logistical hurdles, particularly over Trump’s ability to impose pricing rules without Congressional approval.
NEU Price at posting:
$12.02 Sentiment: Buy Disclosure: Held
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