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Pharma stocks rebounded and rose into the green Monday afternoon after details of President Donald Trump’s executive order on drug prices became public.
The order does not include a legal mandate that pharmaceutical companies lower prices in the U.S., The New York Times (NYT+0.23%) reports. Instead, it asks pharma firms to voluntarily lower their prices.
Shares of Eli Lilly (LLY+0.74%) were up 2.4% Monday afternoon, after being down 2% earlier in the day. Novo Nordisk (NVO+1.61%) stock had climbed 2% by midday, Johnson & Johnson (JNJ-0.53%) stock gained 0.2%, and Novartis (NVS-0.56%) stock was about even on the day. Pfizer (PFE+1.72%) was up 3.1% and Merck (MRK-0.30%) gained 5.2%.
Pharma stocks had fallen earlier Monday before the details of the executive order became known.
The executive order said the Trump administration would consider taking regulatory actions or importing drugs from other nations if drugmakers don’t lower prices voluntarily, according to The Times. The order also called on federal agencies to look into why European countries get lower prices, and to attempt to get them to pay more.
“I’m not knocking the drug companies,” Trump said before signing the order Monday. “I’m really more knocking the countries than the drug companies.”
Trump wrote on his social media site Truth Social late Sunday that the U.S. would pay the same price as the nation that pays the lowest price under a new “Most Favored Nations Policy.” He followed that up with a post Monday saying drug prices would fall by 59%, though he did not specify how he arrived at that number.
Trump tried unsuccessfully to enact a similar measure in his first term that would have applied to about 50 popular drugs covered by Medicare. The plan was blocked by a federal court that ruled the administration had taken shortcuts in the policymaking process.