President Donald Trump is set to announce on Friday afternoon a new pricing deal that will see British pharmaceutical giant AstraZeneca (AZN) sell some of its drugs at lower prices in the U.S., according to multiple media reports.
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This is even as the Cambridge-based company on Thursday broke ground on its new $4.5 billion plant in Virginia as part of its planned $50 billion investment to ramp up U.S. drug production and research and development. The plant is designed to be the biggest of its facilities around the world.
However, these series of updates failed to move AZN shares, which traded in the red zone on Friday afternoon at around $84 per share.
According to reports, AstraZeneca would sell its medications at “most-favored-nation” (MFN) prices that will help bring down their cost, including for Americans on healthcare program Medicaid. However, more broad details of the pricing deal are yet to emerge.
AstraZeneca Trails Rival Pfizer’s Trump Deal
The move follows a similar deal U.S.-based rival Pfizer (PFE) struck with President Trump late last month, with the company obtaining a three-year grace period from the administration’s tariffs on the pharmaceutical industry. Trump during the announcement had said his government was also in talks with other pharmaceutical companies for a similar arrangement.
Earlier this week, California-based pharmaceutical Amgen (AMGN) also announced a 60% price cut on its popular low-cholesterol medication, Repatha, and launched a direct-to-consumer drug discount platform. However, the move was not tied to an arrangement with the U.S federal government.
Trump Fights High Drug Prices with Tariffs
The discounts come as President Trump has been clamoring for pharmaceuticals in the country to lower drug prices, using tariffs as a negotiation tool. Trump last month even announced a new 100% tariff on branded drugs imported into America.
It is important to note that during the unveiling of the arrangement with Pfizer, Trump decried that U.S. consumers have been subsidizing research and development costs “for the entire planet.” He urged that pharma businesses make 75% of their profit from the country despite Americans only accounting for 13% of all drug prescriptions.
Earlier in July, the American leader wrote to 17 major pharmaceutical firms, including AstraZeneca, asking that drug prices under Medicaid be sold at MFN prices — or what is equal to or lower than prices in other developed countries.
Is AstraZeneca Stock a Buy or Sell?
Turning to Wall Street, AstraZeneca’s shares currently have a Strong Buy consensus recommendation, as seen on TipRanks. This is based on three Buys assigned by analysts over the past three months. Moreover, the average AZN price target of $92.33 suggests a possible 10% increase from the current position.
