LONDON: European healthcare stocks jumped on Wednesday, mirroring moves in the United States, a day after Pfizer and President Donald Trump said the US-based drugmaker had agreed to lower prescription drug prices in the Medicaid programme in exchange for tariff relief.
Healthcare stocks in the US and Europe have been lagging this year due to uncertainty about the Trump administration’s stance on drug pricing.
Analysts said the deal had reduced uncertainty for the sector.
“We think this removes yet another policy overhang that has stymied the sector this year and expect a favourable investor response,” Citi analysts said in a note. Pfizer is the first drugmaker to announce a deal.
Europe stocks gain on healthcare, luxury
Trump sent letters to 17 leading drug companies in July telling them to slash prices to match those paid overseas.
He asked them to respond with binding commitments by September 29.
Europe’s healthcare sector index rose 2.77%, which if sustained would be its biggest daily percentage gain since April.
Pharmaceutical companies and their suppliers – many of which have business in the United States – surged, topping Europe’s STOXX 600 index.
Ambu rose 8.9%, Sartorius 7.8%, and Merck, Roche and AstraZeneca all climbed around 5%.
Pfizer shares rose 7% on Tuesday, and other US pharma stocks also gained.
American Dollar Exchange Rate