Trump put up on slashing drug costs sends Teva tumbling

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The share value of Teva Pharmaceutical Industries (TASE: TEVA; NYSE: TEVA) is down by 7% in Tel Aviv this morning, within the wake of the announcement by US President Donald Trump of his intention of chopping costs of prescribed drugs within the US “instantly” by 30-80%, by way of an govt order. “I will probably be instituting a MOST FAVORED NATION’S POLICY whereby the USA pays the identical value because the Nation that pays the bottom value anyplace within the World,” Trump posted on the Reality Social community.

Teva's R&D labs in Netanya credit: Teva PR

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The announcement has despatched share costs of prescribed drugs firms all over the world tumbling. Japanese firms Chugai Prescription drugs and Takeda Prescription drugs are down 11% and 5.5% respectively; Korean firm Celltrion is down 3.9%; and Indian firm Solar Pharmaceutical Industries (which holds Israeli firm Taro) is down 3%.

Uri Hershkovitz, supervisor of hedge fund Bennu Pharma, advised “Globes” that due to the particularly excessive publicity of Teva’s drug Austedo to authorities channels, if the drug is included within the Most Favored Nation coverage, each proportion level fall within the value of the drug will imply a 1% reduce in Teva’s money movement. Austedo, an authentic drug that deal with’s involuntary motion in Huntington’s illness sufferers, is at the moment Teva’s main product, and is predicted have gross sales of $2 billion this 12 months.

On the whole, Hershkovitz says, “For the reason that energy of presidential govt orders is proscribed, it’s not clear in the mean time how Trump intends to hold out the reduce in costs, via what legislative observe, which authorities applications will take part within the transfer, which nations will function reference factors for Most Favored Nation, and what value reductions will end result. The manager order in itself won’t result in a reduce in costs. That can in all probability require laws within the homes of Congress, the place the pharmaceutical foyer is robust. All the identical, we should always keep in mind that the Democrats, who’ve all the time been in favor of such laws, might tip the steadiness.”

Hershkovitz estimates that till additional particulars are recognized, the prescribed drugs sector will probably be unstable.

Printed by Globes, Israel enterprise information – en.globes.co.il – on Might 12, 2025.