Pfizer (PFE) Faces Tough Choices as Trump Targets U.S. Drug Prices

Pfizer (PFE) and other drug companies recently met with the Trump administration to talk about lowering U.S. drug prices, but no firm agreements have been made yet, according to CEO Albert Bourla. The meetings follow an executive order issued by President Trump last month, which directs drugmakers to match U.S. drug prices with the lower prices paid by other wealthy countries. As a result, the administration plans to set “Most Favored Nation” price targets within 30 days, with the Department of Health and Human Services expecting U.S. drugmakers to set their prices at the lowest level found in high-income countries.

However, while speaking at Goldman Sachs’ Global Healthcare Conference, Bourla said that he is unsure what will happen when the 30 days are up. He explained that the administration has started meeting with drug companies, but so far, the talks have only covered broad ideas, not detailed plans. Bourla, who is also chairman of industry group PhRMA, added that PhRMA has not been directly involved in these discussions. In addition, experts say that it’s still unclear how the U.S. will enforce the new policy, which could be challenging to implement.

Bourla also addressed how this policy could affect Pfizer’s global business. He hopes that U.S. pressure will push European countries to raise their drug prices. However, if that does not happen and U.S. price controls are introduced, Pfizer may stop offering its drugs for government reimbursement in certain countries where prices stay too low. Nevertheless, Pfizer would still sell those drugs on the open market. “We will leave them in the open market,” Bourla said, meaning the products would still be available to those willing to pay out of pocket.

Is PFE Stock a Good Buy?

Turning to Wall Street, analysts have a Moderate Buy consensus rating on PFE stock based on five Buys, 13 Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average PFE price target of $27.69 per share implies 15.6% upside potential.

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