Source: Sharecast
On Tuesday, in an agreement announced with Pfizer, Trump outlined a framework for the implementation of his Most Favoured Nation drug pricing plans following his letter to pharmaceutical companies in July.
JPM noted that the agreement is built on three pillars, broadly consistent with Trump’s letter, including: (i) MFN pricing for Medicaid, with Pfizer agreeing to offer almost all of its drugs to Medicaid at most-favoured nation pricing, (ii) On new launches, Pfizer agreed that it price new drugs in the US in-line with the prices offered to other MFN countries, (iii) the establishment of TrumpRx, where drugs will be offered directly to consumers through a yet-to-be-launched website at discounts if they do not use insurance and opt for self-pay.
In addition, in exchange for Pfizer committing to a $70bn investment in manufacturing and research in the US and committing to reshoring their manufacturing, the company will be exempt from pharmaceutical tariffs for three years.
JPM pointed out that at the White House press briefing, Trump signalled confidence that other pharma companies will agree to MFN pricing over time.
"Overall, we see Pfizer’s agreement on MFN as a potential bellwether for the sector which, we anticipate is likely to be replicated by EU Pharma companies and should therefore result in a broadly manageable impact from MFN on EU Pharma, reassuring investors," the bank said.
The White House announced on Tuesday that it was establishing a website, TrumpRX.gov, through which drug manufacturers can offer their drugs to consumers at discounts to list prices.
JPM noted that since the Executive Order on 12 May requesting that pharma companies participate in Direct-to-Consumer and/or Direct-to-Business distribution models for high-volume, high-rebate prescription drugs, there have been several announcements from companies engaging in such initiatives.
For example, it noted, Novo Nordisk’s sale of Ozempic DTC at $499, Novartis offering Cosentyx to consumers at a 55% discount to list price, and AstraZeneca offering Farxiga and Airsupra on AstraZeneca Direct.
"This is aligned with the response from the Pharmaceutical Research and Manufacturers of America, PhRMA, on Monday, whereby it referenced the establishment of AmericasMedicines.com for a similar purpose," JPM said.
"We see this as potentially facilitating drug access for those without insurance, but unlikely to have any impact on pharma sales."