What Most-Favored-Nation Status Could Mean for Pharmaceutical Stocks
Recently, the Trump Administration signed an executive order to lower the prices Americans pay for prescription drugs. According to the administration, the U.S. funds roughly 75% of global pharmaceutical profits despite having less than 5% of the population.It's no secret that brand-name drugs in the U.S. are much more expensive than they are abroad. In the spirit of fairness, the new executive order directs the Secretary of Health and Human Services (HHS) to communicate price targets to drugmakers.If drugmakers don't accept new price targets, as expected, HHS is to propose rules that impose most-favored-nation pricing. Here's a look at how this could hammer profits for Eli Lilly, Pfizer, Bristol Myers Squibb (NYSE: BMY), and their peers.Continue reading

Recently, the Trump Administration signed an executive order to lower the prices Americans pay for prescription drugs. According to the administration, the U.S. funds roughly 75% of global pharmaceutical profits despite having less than 5% of the population.
It's no secret that brand-name drugs in the U.S. are much more expensive than they are abroad. In the spirit of fairness, the new executive order directs the Secretary of Health and Human Services (HHS) to communicate price targets to drugmakers.
If drugmakers don't accept new price targets, as expected, HHS is to propose rules that impose most-favored-nation pricing. Here's a look at how this could hammer profits for Eli Lilly, Pfizer, Bristol Myers Squibb (NYSE: BMY), and their peers.