European healthcare stocks hit by Trump drug order

The German share price index DAX graph at the stock exchange in Frankfurt
FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, September 7, 2020. REUTERS/Staff

September 14, 2020

By Joice Alves

LONDON (Reuters) – Stocks in the European healthcare sector underperformed the broader market in early trading on Monday after U.S. President Donald Trump signed an executive order to lower drug prices in the United States.

The healthcare index <.SXDP> was down 0.25% at 0853 GMT, while the pan-European benchmark STOXX 600 added 0.15%.

Trump aims to lower drug prices in the U.S. by linking them to those of other nations and expanding the scope of a July action.

Analysts estimate that more than 60% of global pharmaceutical profits are generated in the United States due to the high drug prices.

Credit Suisse analysts said that the impact of the executive order would be negative if implemented and that some was resistance from the industry.

European shares that could be hit by the U.S. move include AstraZeneca <AZN.L>, GlaxoSmithKline plc <GSK.L>, Novartis <NOVN.S>, Roche <ROG.S>, Sanofi <SASY.PA>, Bayer <BAYGn.DE> and Novo Nordisk A/S <NOVOb.CO>, according to Credit Suisse.

(Reporting by Joice Alves, editing by Louise Heavens)