Trump Vows to Slash U.S. Drug Prices by Up to 1500%, Triggering Sell-Off in Pharma Stocks

On August 25, U.S. President Donald Trump announced plans to reduce domestic prescription drug prices by 1,400 to 1,500 percent, reinforcing the White House’s hardline stance on pharmaceutical costs. Speaking at a briefing, he declared that his administration would “get serious about the cost of drugs in America” and indicated that it would soon tackle pricing metrics and consider imposing tariffs on imported medicines.

Following Trump’s remarks, the S&P 500 Health Care sector fell more than 1.3 percent to a session low. DexCom shares plunged over 6.6 percent, Moderna declined up to 5.6 percent, and Align Technology, Pfizer, Cooper Companies, Merck, Becton Dickinson and Regeneron each slid more than 2 percent. Amgen and Bristol Myers Squibb lost over 1 percent, while Abbott Laboratories and Johnson & Johnson eased at least 0.3 percent. The Nasdaq Biotechnology Index dropped 1.57 percent, with Sarepta Therapeutics tumbling more than 8 percent, Iovance Biotherapeutics falling 5.76 percent at its weakest point, and Entrada Therapeutics down over 6 percent.

Nearly a month earlier, Trump had written to major pharmaceutical firms—including Johnson & Johnson, Pfizer, AstraZeneca, Bristol Myers Squibb, GlaxoSmithKline, Merck, Novartis, Roche and Sanofi—setting a September 29 deadline for price reductions. He demanded that these companies extend their lowest global drug prices to all Medicaid patients under a “Most-Favored-Nation” pricing scheme and warned that failure to comply would prompt his administration to “use every tool in our arsenal to protect American families from continued abuse in drug pricing.”

According to CCTV News, Trump told CNBC on August 5 that the U.S. would begin by levying “modest tariffs” on imported medications, with plans to raise the rate to 150 percent within a year and eventually to 250 percent, as part of an effort to bring pharmaceutical manufacturing back to domestic soil. He did not specify the initial tariff level.

Treasury Secretary Scott Bessent has signaled that tariffs on pharmaceuticals remain on the table and advised close attention to the sector. White House Trade Advisor Peter Navarro has also suggested invoking Section 232 of the Trade Expansion Act of 1962 to justify import duties on drugs.

Analysts view these measures as part of a broader effort to repatriate pharmaceutical production, reduce dependence on foreign supply chains and alleviate the prescription-drug burden on American households. They may also represent a component of a wider healthcare policy initiative aimed at lowering overall drug costs.