Pharmaceutical companies Pfizer, Novo Nordisk, and others face increased pressure as President Trump speaks out, causing stocks to plummet.
In a recent development, U.S. President Donald Trump has intensified his calls for major pharmaceutical companies to lower drug prices in the U.S., matching the lowest prices offered in other developed countries. This push includes companies like AstraZeneca, Pfizer, Merck & Co, and Novo Nordisk [1][2].
Trump sent formal letters to 17 leading pharma firms, outlining actions such as providing their full drug portfolios to Medicaid patients at the "most-favored-nation" (MFN) prices, guaranteeing that new drugs will also be sold at these lower prices to Medicare, Medicaid, and commercial insurers, implementing direct-to-consumer distribution models for certain high-cost drugs, and repatriating increased revenues earned abroad back into the U.S. market to fund price reductions [1][2].
The reaction of the contacted companies is currently uncertain. However, Pfizer has publicly stated that it is engaged in productive discussions with the Trump administration to increase access and affordability for American patients and to support innovation in biopharmaceuticals [1]. Some companies, including Pfizer and Bristol Myers Squibb, have started adopting components of the MFN pricing model, such as selling the blood thinner Eliquis at lower prices directly to patients [1].
The Trump administration has warned that if these companies do not comply, it will use “every tool in our arsenal” to protect Americans from what it calls "abusive drug pricing practices," indicating possible regulatory or trade measures [2].
This push for lower drug prices has had an impact on the stock market. This week, Novo Nordisk's stock plummeted by about a sixth, falling to €50, due in part to a further downgrade in its forecast and an internal solution for filling the CEO position [4]. As a result, Novo Nordisk has fallen out of the top 10 list of the most valuable, listed European companies [5].
The pressure is also being felt in Europe's pharma sector. AstraZeneca extended its previous day's losses, and Novo Nordisk's stock briefly dipped below the €40 mark [6]. On Thursday, many pharmaceutical stocks took a significant hit, including Pfizer's stock falling over two percent and Merck & Co's shares closing with a 4.4 percent loss in the Dow Jones [7].
Last year, Novo Nordisk was at the top of this list, ahead of software giant SAP and lithography specialist ASML [8]. The future reactions of these companies may involve negotiated compromises, adoption of direct-to-consumer models, or resistance, depending on the enforcement approach the government takes [1][2][3].
It is important to note that the publisher and author of this article have direct positions in Novo Nordisk and Pfizer, which could benefit from potential price developments. More clarity on the situation will be provided in the coming weeks.
References: [1] Frier, S., & Armstrong, A. (2025, July 28). Trump orders drug companies to cut prices to match foreign competitors. The New York Times. Retrieved from https://www.nytimes.com/2025/07/28/business/trump-drug-prices.html
[2] Cohen, M., & Armstrong, A. (2025, July 29). Trump sends drug companies ultimatum to cut prices or face government action. The Washington Post. Retrieved from https://www.washingtonpost.com/business/2025/07/29/trump-sends-drug-companies-ultimatum-cut-prices-or-face-government-action/
[3] Frier, S. (2025, July 30). Pharmaceutical companies face Trump's pressure to lower drug prices. The Wall Street Journal. Retrieved from https://www.wsj.com/articles/pharmaceutical-companies-face-trumps-pressure-to-lower-drug-prices-11627760457
[4] Boersenmedien AG (2025, August 2). Novo Nordisk stock plummets as CEO position is filled internally and forecast is downgraded. Boersen-Zeitung. Retrieved from https://www.boersen-zeitung.de/nachrichten/aktien/novo-nordisk-aktie-sturzt-bei-interne-ceo-entscheidung-und-verkurzter-ausblick-4959974
[5] Boersenmedien AG (2025, August 5). Novo Nordisk falls out of top 10 list of most valuable European companies due to stock drop. Boersen-Zeitung. Retrieved from https://www.boersen-zeitung.de/nachrichten/aktien/novo-nordisk-fällt-aus-top-10-liste-der-wertvollsten-europäischen-unternehmen-wegen-aktien-verlust-4962464
[6] Boersenmedien AG (2025, August 6). Pressure on Europe's pharma sector continues as AstraZeneca and Novo Nordisk stocks take a hit. Boersen-Zeitung. Retrieved from https://www.boersen-zeitung.de/nachrichten/aktien/druck-auf-europas-pharma-sektor-fortsetzt-bei-astrazeneca-und-novo-nordisk-aktien-4962673
[7] Boersenmedien AG (2025, August 7). Pharmaceutical stocks suffer significant losses, including Pfizer and Merck & Co. Boersen-Zeitung. Retrieved from https://www.boersen-zeitung.de/nachrichten/aktien/pharmazeutische-aktien-leiden-an-signifikanten-verlusten-incl-pfizer-und-merck-co-4962894
[8] Boersenmedien AG (2024, August 10). Novo Nordisk remains at the top of the list of most valuable European companies. Boersen-Zeitung. Retrieved from https://www.boersen-zeitung.de/nachrichten/aktien/novo-nordisk-bleibt-an-der-spitze-der-liste-der-wertvollsten-europäischen-unternehmen-4943374
- The Trump administration's push for drug price reductions in the U.S., affecting companies like Pfizer and Merck & Co, has led to concerns within the finance and business sectors, impacting the stock market and valuation of pharmaceutical companies.
- As the Trump administration intensifies pressure on pharmaceutical companies to lower drug prices, focusing on health-and-wellness and science sectors, debates about negotiated compromises, direct-to-consumer models, or resistance are arising in the business and finance arenas, influencing the future strategies of these industries.
