(Reuters) -Shares of Pfizer rose about 5% after U.S. President Donald Trump said on Tuesday the drugmaker will cut the price on all of its prescription drugs sold to the Medicaid insurance program and will introduce all new prescription drugs at a "most favored nation" price.
The White House is also planning to unveil a direct-to-consumer website, called TrumpRx, for Americans to buy drugs. Pfizer will launch sales of some of its drugs directly to consumers through that website.
According to a poster
on display at the White House press conference, Pfizer will make drugs — rheumatoid arthritis drug Xeljanz, migraine treatment Zavzpret, dermatitis drug Eucrisa and post-menopausal osteoporosis medication Duavee — available on the website discounted between 40% and 85%.
Trump also added that other drugmakers will commit to similar agreements in coming weeks.
Shares of other drugmakers — Merck, Eli Lilly, AbbVie and Bristol Myers Squibb — were up between 3% and 5%.
While the "most favored nation" pricing and pharmaceutical tariffs have loomed as a concern for the sector for some time, today's announcement appears to read positively, said BMO Capital Markets analyst Evan Seigerman.
Trump sent letters to 17 leading drug companies in July, telling them to slash drug prices to match those paid overseas — a policy that the president called "most favored nation pricing," or MFN. The drug companies were asked to respond with binding commitments by September 29.
Pfizer is the first company to announce a deal.
"Today's deal seems to set a path for other pharmaceutical players to follow, allowing for headline pricing concessions and a Trump 'win,' without more punitive implementation of MFN/tariffs," Seigerman said.
(Reporting by Sneha S K in Bengaluru; Editing by Alan Barona)
