Trump's MFN deal with Pfizer could be bellwether for pharma sector, says JPM

(Sharecast News) - US President Donald Trump's 'Most Favoured Nation' deal with Pfizer could be a bellwether for the pharmaceutical sector and reassure investors over a broadly manageable impact, JPMorgan said in a research note On Tuesday, in an agreement announced with Pfizer, Trump outlined a framework for the implementation of his Most Favoured Nation drug pricing plans following his letter to pharmaceutical companies in July.

JPM noted that the agreement is built on three pillars, broadly consistent with Trump's letter, including: (i) MFN pricing for Medicaid, with Pfizer agreeing to offer almost all of its drugs to Medicaid at most-favoured nation pricing, (ii) On new launches, Pfizer agreed that it price new drugs in the US in-line with the prices offered to other MFN countries, (iii) the establishment of TrumpRx, where drugs will be offered directly to consumers through a yet-to-be-launched website at discounts if they do not use insurance and opt for self-pay.

In addition, in exchange for Pfizer committing to a $70bn investment in manufacturing and research in the US and committing to reshoring their manufacturing, the company will be exempt from pharmaceutical tariffs for three years.

JPM pointed out that at the White House press briefing, Trump signalled confidence that other pharma companies will agree to MFN pricing over time.

"Overall, we see Pfizer's agreement on MFN as a potential bellwether for the sector which, we anticipate is likely to be replicated by EU Pharma companies and should therefore result in a broadly manageable impact from MFN on EU Pharma, reassuring investors," the bank said.