Trump Strikes Again: Sends Warning Letter to Eli Lilly and Others, Drug Pricing Back in the Spotlight

TradingKey - On Thursday Eastern Time, U.S. President Donald Trump renewed pressure on the pharmaceutical industry by sending formal letters to several major drugmakers—including Eli Lilly (LLY.US), GlaxoSmithKline (GSK.US), Johnson & Johnson, Regeneron Pharmaceuticals (REGN.US), and AstraZeneca (AZN.US)—demanding concrete action on drug pricing within 60 days. The administration warned that if no progress is made, it will “activate appropriate tools to protect the interests of American citizens.”

The news triggered sharp selloffs across the sector:

• Eli Lilly (LLY.US) reversed earlier gains, closing down more than 2.15%.
• GlaxoSmithKline (GSK.US) plunged over 4%.
• AstraZeneca (AZN.US) declined nearly 4%.
• Johnson & Johnson (JNJ.US) and Regeneron (REGN.US) both fell more than 1%.
• Novo Nordisk (NVO.US), already under pressure, dropped another 5%.

The move is widely seen as a signal of Trump’s intent to follow through on his campaign pledge to tackle high drug prices in a potential second term. Drug pricing has long been a politically charged issue and a top concern for American voters. While the letter stopped short of detailing specific measures, market participants anticipate potential steps such as:

• Expanding government price negotiation authority,
• Allowing more aggressive use of imported drug alternatives,
• And launching hearings and investigations into high-profit drug products.

For investors, the message is clear: regulatory scrutiny remains a significant overhang. Even with enthusiasm around AI and biotech innovation, legacy pharmaceutical firms are still squarely in the regulatory crosshairs. In the near term, large-cap drugmakers could see valuation pressure, while smaller, innovative pharmaceutical companies may face heightened risk around pricing power and reimbursement for their products.