Health Care Stocks (IBB) Live: President Trump Promises Lower Drug Prices, Stocks Moving
Key Points
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President Trump plans to sign an executive order directing drug makers to lower the prices of medications.
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Trump wants drug prices to come down “almost immediately” by 30% to 80%.
Live Updates
Pharmaceutical Stocks are Still Erasing Earlier Losses
Following the initial shock from President Trump’s drug cost announcement, many of the top pharmaceutical stocks are still rebounding higher.
Amgen (NASDAQ: AMGN | AMGN Price Prediction), for example, is up more than 3.2%, or by $8.60 a share. AbbVie (NYSE: ABBV) is up just over 3.4%, or $6.35 a share. Bristol Myers Squibb (NYSE: BMY) is up just over 2.6%, or by $1.25 per share.
Even the iShares Biotechnology ETF (NASDAQ: IBB) is up 3.87%, or by $4.51 on the day.
Drug Stocks Are Expected to Be Okay
While drug companies and investors dreaded Trump’s announcement, it won’t take much away from leading pharmaceutical companies.
According to Barron’s, “It looks like it could be a blessing in disguise for drug makers, fundamentally restructuring the U.S. drug industry in a way that hurts pharmacy benefit managers.”
The new order focuses more on the direct-to-consumer market – an option that cuts out insurers and pharmacy benefit managers. We also have to consider that drug makers have spent a considerable amount of money attacking pharmacy benefit managers, whose rebates are blamed for higher U.S. drug prices, as also noted by Barron’s.
President Trump will order drugmakers to lower the prices of medications. All to bring drug costs in line with what other countries pay.
According to Reuters, “White House officials said the government will give drug makers price targets in the next 30 days and will take further action to lower prices if those companies do not make significant progress towards those goals within six months of the order being signed.”
At the moment, Trump wants drug prices to come down “almost immediately” by 30% to 80%.
“The Pharmaceutical/Drug Companies would say, for years, that it was Research and Development Costs, and that all of these costs were, and would be, for no reason whatsoever, borne by the ‘suckers’ of America, ALONE,” said President Trump, as quoted by Truth Social.
While the news initially dragged some of the biggest drug stocks lower, many are now surging higher. Amgen (NASDAQ: AMGN), for example, is up more than 3.2%, or by $8.60 a share. AbbVie (NYSE: ABBV) is up just over 2%, or $3.55 a share. Bristol Myers Squibb (NYSE: BMY) is up just over 2.6%, or by $1.25 per share.
Even the iShares Biotechnology ETF (NASDAQ: IBB) is up 3.7%, or by $4.35 on the day.
© Photo by Alex Wong/Getty Images
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