Pharmaceutical stocks, including Merck (NSE:PROR) (MRK), Pfizer (NYSE:PFE), and Eli Lilly (NYSE:LLY) traded in the green Monday morning despite declining in pre-market hours after President Donald Trump signed a new executive order that will push drugmakers to sell prescription drugs at a lower price and directly to patients.
“For the first time in many years, we’ll slash the cost of prescription drugs, and we will bring fairness to America. Drug prices will come down by… between 59% to 80%, even 90%,” Trump said during a press conference. “But actually more than that if you think about it mathematically.”
Merck’s stock rose nearly 5% in midday trade, while Pfizer’s stock was up 3%, and Eli Lilly and Bristol-Myers (BMY) shares rose around 2%.
“Starting today, the U.S. will not subsidize the healthcare of foreign countries… and will no longer profiteering and price gouging from Big Pharma,” he added, explaining that pharmaceutical companies had been putting the cost of research and development on U.S. consumers while subsidizing drug rates in other countries.
According to Trump, the new reduction in drug costs will “equalize” rates across the globe, with the U.S. getting the “most-favored nation” pricing.
He added that Big Pharma would either voluntarily abide by this principle or the federal government would use its power to ensure the U.S. pays the same price as other countries, including investigating their pricing mechanisms.
Trump also stated that the U.S. will be opening up its market to safe and legal imports of affordable drugs from other countries to put downward pressure on prices.
Trump said the savings from cutting down on Medicare, Medicaid, and drug costs will “easily pay for the Golden Dome, and we’ll have a lot of money leftover.”
The ‘Golden Dome’ is a proposed advanced missile defense system for the U.S. that Trump announced in early 2025 when he signed an executive order titled “Iron Dome For America.”
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