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Pharma stocks head south as Trump forces them to display drug prices in TV ads

“Drug companies have to come clean about their prices in TV ads. If drug companies are ashamed of those prices – lower them!”

donald trump
The US is home to world’s largest and most lucrative pharma industry

Pharma stocks around the world headed lower on Thursday after President Donald Trump warned drugmakers they will have to list the price of their drugs in television adverts.

Companies will have to include the price for any medication that costs more than US$35 for a month's supply or the usual course of treatment.

“If drug companies are ashamed of those prices – lower them!” Trump tweeted on Wednesday afternoon.

Pfizer Inc (NYSE:PFE), AbbVie Inc (NYSE:ABBV) and Gilead Sciences Inc (NASDAQ:GILD) all dropped between 1.5-2% on the back of the news.

In the UK, shares in AstraZeneca PLC (LON:AZN) and GlaxoSmithKline PLC (LON:GSK) also fell.

Lowering drug prices has been a key focus for Trump and his administration, which last year set out their blueprint for bringing down prices of prescription drugs.

Two bills were passed by US politicians on Wednesday aimed at making cheaper generic drugs more available, with no votes against.

“Requiring the inclusion of drugs' list prices in TV ads is the single most significant step any administration has taken toward a simple commitment: American patients deserve to know the prices of the healthcare they receive,” said health & human services secretary Alex Azar.

Experts have warned that such adverts may scare patients away from drugs they could actually afford with their health insurance coverage.

Lobby groups for the pharma industry said the new rule raises First Amendment concerns, as well as challenges implementing it within 60 days.

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