Since May 12, Trump has said that he has been talking with big names in the industry. He denounces laboratories that blame each other or seek policy changes in their favor.

According to Karoline Leavitt, the most recent data confirms that Americans pay up to three times more for their medicines than people in other developed countries. A study by the Rand Corporation estimates that prices are on average 2.5x higher than in France.

In his letter, he calls for four concrete measures from the industry giants (letter at the end of the article):

  • Extend Most Favored Nation pricing to the Medicaid program;

  • Apply these prices to all new drugs;

  • Reinvest profits made abroad back into the US system;

  • Allow direct purchase of drugs at MFN rates.

For Trump, the concept of "most favored nation" means that prices in the US must be aligned with the lowest prices in developed countries. He accuses the latter of benefiting from American innovation without bearing the cost. With Donald Trump, we often come back to the fact that the US pays for the rest of the world, a sort of guiding principle of his policy.

17 groups targeted

The markets are already looking down today, but pharma stands out in bright red on the screens. The 17 groups concerned are: Eli Lilly, AbbVie, Boehringer Ingelheim, Bristol Myers Squibb, Novartis, Gilead Sciences, EMD Serono, Pfizer, Novo Nordisk, AstraZeneca, Amgen, Genentech, Johnson & Johnson, GSK, Merck, Regeneron Pharmaceuticals, and Sanofi.

European laboratories are also facing uncertainty regarding the trade agreement with the European Union. Their sector remains excluded from the trade agreement signed by Washington and is still the subject of a Section 232 investigation.

Despite the shock on the stockmarket, analysts are putting things into perspective. For UBS analyst Trung Huynh these letters are just another salvo with no real impact: "Just a shot in the dark," he says.

Legal obstacles remain. Presidential decrees do not have absolute authority over Medicaid, a federal program. Trump had already tried to push the industry into making voluntary concessions, with some groups promising to relocate part of their production to the United States.

Stacie Dusetzina, a professor of health policy at Vanderbilt University, nevertheless believes that some laboratories could offer certain products for direct sale at a lower price than that currently charged through distributors.

In the meantime, the impact on the stock market is very real. The Bloomberg European Biotech/Pharma Index is down 1.7% and the S&P 500 Pharmaceutical Index is down 2.7%. Novo Nordisk, meanwhile, has dropped out of the top 10 largest European companies by market capitalization and hit a four-year low.

No stock has been spared, even UCB, for example, which did not receive a letter and posted good results, saw its share price fall 4%.

Letter sent on July 31 by President Donald Trump to the CEO of Eli Lilly (Source: Truth Social; presidential account)