Pfizer's stock price went up nearly 2% or 1.91% on Tuesday as US President Donald Trump announced a price deal with vaccine maker. The pharma manufacturer is expected to sell its drugs at a lower price to the US Medicaid Insurance Program as part of an anticipated deal with Trump to push forward his "most-favoured nations" policy, Washington Post reported.
This policy involves US residents paying for a prescription drug at an amount that is comporable to what is paid in the developing countries and not any higher.
Trump's administration argued that people within the US pay "massively higher prices" for the same drug compared to other rich countries. It said that the US was "subsidizing prices" for the rest of the world with its high cost for prescription medication, and that this would be discontinued.
Trump had also set a deadline of Sept. 29 for major pharmaceutical companies like Pfizer and Johnson & Johnson to reduce their prices. He did so be sending letters to the chief executive officers of major pharma firms, telling them to extend the "most-favored-nation" pricing to Medicaid.
"Domestic MFN pricing will require you, and all manufacturers, to negotiate harder with foreign freeloading nations. U.S. trade policy will endeavor to support this. However, increased revenues abroad must be repatriated to lower drug prices for American patients and taxpayers through an explicit agreement with the United States," Trump said.
Trump said that if these companies failed to comply with the mandate by the set deadline, it would compel his administration to "deploy every tool in our arsenal to protect American families from continued abusive drug pricing practices."
AstraZeneca, Bristol Myers, GSK, Merck, Novartis, Roche and Sanofi, were some of the other major pharmaceutical firms issued the letter. Trump also said in August that he will reduce drug prices by 1,400% to 1,500%.
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