DRUG giants were put on notice by Donald Trump yesterday that he would be slashing prices for medicines in the US to the cheapest available.
The move is another blow for Britain’s drug giants AstraZeneca and Glaxo-SmithKline which had believed pharmaceuticals would escape the tariffs.
The President signed an executive order which included a “favoured nation” policy which he said means “the US will pay the same price as the nation that pays the lowest price anywhere in the world”.
Mr Trump said last night it would cut drug prices by “60 to 70 to 80 to even 90 per cent” for Americans.
The US is the biggest market for AstraZeneca, accounting for 40 per cent of its £40billion annual sales and just over half of GSK’s £23billion.
Both companies have previously tried to shrug off the impact of tariffs and highlighted they had both spent billions of dollars building facilities in the US.
GSK boss Dame Emma Walmsley, who met Mr Trump in his first term, recently said that she was “confident” in the firm’s ability to navigate with flexible supply chains.
AstraZeneca, which developed the first UK Covid vaccine in 2020, tried to appeal to Mr Trump by saying it agreed the US could not “shoulder the burden” of the cost of innovation alone.
But a spokesman warned that there would have to be thorough consultation to avoid “risking disrupting patient care, undermining US leadership in biotechnology, and stifling the innovation that drives health advancements”.
Despite the initial threat sending shares lower, the executive order was light on details.
Investors hoped it might not be as bad as feared as Mr Trump seemed most focused on pharmacy managers and health insurers.
Shares in AstraZeneca closed up 0.31 per cent to £102,72. GSK rose by 1.6 per cent to £13.99.
Mr Trump will give companies price targets in the next 30 days and says he will use federal powers if there is not “significant progress” in the next six months.
PRICE NOT RIGHT ON ZONE BILL
THERE is little chance that controversial zonal electricity pricing will come into effect before the next election, according to a new report.
Zonal pricing — which could mean cheaper bills for households who live near wind farms but higher prices for those in the south of England — could take until the mid-2030s to be brought in.
EPAThere is little chance that controversial zonal electricity pricing will come into effect before the next election, according to a new report[/caption]Analysts at Cornwall Insight believe consultations, legislation and transitional arrangements will bog down the process.
Energy Secretary Ed Miliband seems in favour of it and Octopus Energy has been campaigning in its favour.
However, Scottish Power, SSE and Centrica have argued the debate is slowing down investment in building infrastructure at a time when energy security should be prioritised.
Kate Mulvany at Cornwall Insight said: “Political backing and industry support may help, but a go-live before 2030 remains incredibly unlikely.”
STOCK AND AWE
LONDON’S sleepy stock market got a wake-up call yesterday from a firm announcing the biggest listing in years.
Cobalt Holdings plans to raise £174million from a stock market debut next month.
The company holds physical cobalt — a silvery blue metal used in car batteries — and will buy 6,000 tons more from commodities giant Glencore, which will take a ten per cent stake in the business.
Cobalt Holdings boss Jake Greenberg said: “We believe now is the right time to build a strategic stockpile of cobalt.”
NISSAN is doubling the number of job cuts it is making to nearly 20,000, with the Japanese carmaker planning to axe a further 10,000 roles on top of the 9,000 it had already announced.
The firm said it expects to lose £4billion this year.
VIRGIN’S MERGER
VIRGIN Media O2 has agreed to merge its business customer unit with Daisy Group to create a focused telecoms unit with £1.2 billion of sales.
The firm will have around 700,000 business customers and will bring Virgin Media’s broadband fibre network and mobile infrastructure together with Daisy’s IT platforms and customer service offering.
Daisy Group will have a 30 per cent stake.
Its boss, Matthew Riley, said there would be “significant” cost savings but could not give “categorical assurances” on jobs.
£25bn FOR UK FIRMS
THE UK’s biggest pension funds have signed up to a deal that pledges to invest ten per cent of their assets by 2030 in private firms to boost the economy.
Under the Mansion House Accord, half of the investments will be ring-fenced, giving a £25 billion boost.
Aviva, Legal & General, Phoenix Group, Nest, M&G and Aon have signed up.
Writing for The Sun, Chancellor Rachel Reeves explains more.
PENSION FUNDS BACK BRITAIN
By Rachel Reeves, Chancellor of the Exchequer
BRITAIN is full of brilliant businesses.
From high streets to tech hubs, family firms to new start-ups, they drive the growth we need.
So it’s fantastic news that today our pension funds have pledged to back these businesses — and back Britain — with billions of pounds of new investment.
These funds manage huge amounts of our hard-earned savings.
But for years, too many pension pots have been locked away overseas — delivering benefits to communities halfway around the world.
That is changing.
This pledge means those who have signed up will invest 5 per cent here at home, worth around £25billion extra to the UK economy.
This money will flow into the brilliant businesses this country has to offer.
It will bring our high streets back to life after years of decay and help build the new homes needed to make the dream of homeownership a reality once more.
And it’s another example of our Plan for Change in action, delivering security for working people and communities, as we fix our broken planning system, strengthen our NHS and put more money into people’s pockets — today, tomorrow and in retirement.
In a changing world, our Plan for Change backs British business to succeed and make the British people better off.
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