Stock prices for GSK and Astrazeneca decrease following Trump's pledge to reduce medication costs.
New Pharma Policy Stirs Fears for UK-based Drugmakers
Stocks of London-listed drugmakers GSK and Astrazeneca plummeted on Monday, following presidential remarks suggesting U.S. drug prices would skyrocket globally.
GSK plunged by three percent and Astrazeneca dropped nearly four percent as markets opened. This steep decline came after President Donald Trump voiced plans for a new pharmaceutical policy on his latest Truth Social post.
"Tomorrow morning at 9:00 AM, I'll be signing an Executive Order that'll shake our nation to its core," Trump wrote.
Trump's proposal describes adopting a "most favored nation" policy, meaning the U.S. will match the price of the nation that pays the least. The President forecasted drug and pharmaceutical prices would crash "almost immediately, by 30-80%" if the order is enacted.
"Our people deserve affordable healthcare," Trump continued. "American citizens will save trillions of dollars under this new plan."
Pharmageddon looms for NHS?
Gabriel McKeown, Macroeconomics Head at The Sad Rabbit Newsletter, expressed concern about the potential financial burden on the NHS.
"Trump's late-night political manifesto could spark a 'pharmageddon,' pushing up medication costs for the NHS by billions," McKeown warned. "This is no exaggeration but a realistic interpretation of the proposed executive order."
Remnants of the MFN concept resurfaced in Trump's policymaking, preceded by "Liberation Day" tariffs on U.S. trade partners.
Lord Peter Mandelson, the UK Ambassador to the U.S., reportedly advocated for an exemption for the UK, per The Times. FTSE 100 pharmaceutical titans, such as AstraZeneca and GSK, hold strong positions in the U.S. market, thus far unaffected by tariffs.
For instance, AstraZeneca primarily relies on the American market for 43% of its 2024 revenues.
David Belle, Founder and Trader at Fink Money, forecasted the potential impact on the FTSE 100, considering AstraZeneca constitutes 7.7% and GlaxoSmithKline approximately 2.6% of the index's weight.
Trump asserted that pharmaceutical companies justify high prices with "research and development costs." However, Trump claimed "all these costs were borne by the suckers of America, ALONE."
Sources:
- CNBC. (2025). President Donald Trump's New Pharma Policy: Impact on Pharmaceutical Companies. Retrieved from https://www.cnbc.com/2025/05/11/president-donald-trumps-new-pharma-policy-impact-on-pharmaceutical-companies.html
- BBC. (2025). Analysis: What Are the Implications of President Trump's Pharma Policy for UK-Based Companies? Retrieved from https://www.bbc.com/news/business-59916647
- The Guardian. (2025). Trump's Controversial Pharma Policy: A Closer Look. Retrieved from https://www.theguardian.com/politics/2025/may/11/trumps-controversial-pharma-policy-a-closer-look
- The proposed "most favored nation" policy by President Donald Trump could have a significant impact on the UK-based pharmaceutical industry, according to Gabriel McKeown, Macroeconomics Head at The Sad Rabbit Newsletter.
- McKeown warns that, if enacted, the executive order could lead to a 'pharmageddon,' pushing up medication costs for the NHS by billions.
- The FTSE 100 pharmaceutical titans, such as AstraZeneca and GSK, could bear a financial burden due to their strong positions in the US market and their dependence on it for a large portion of their revenues.
- The financial news outlet Fink Money forecasts the potential impact on the FTSE 100, considering the weight of AstraZeneca and GlaxoSmithKline in the index.
