Pharma Industry Faces Jitters As Trump Hints At Historic Tariffs, BofA Outlines Probable Timeline
Written by Emily J. Thompson, Senior Investment Analyst
Source: Newsfilter
Tariff Implications: Trump has suggested implementing significant tariffs on foreign pharmaceuticals, which raises concerns among Indian suppliers.
Impact on Drug Costs: There are fears that these tariffs could lead to increased drug prices in the United States.
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Analyst Views on GSK
Wall Street analysts forecast GSK stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for GSK is 38.72 USD with a low forecast of 20.15 USD and a high forecast of 55.60 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
6 Analyst Rating
1 Buy
2 Hold
3 Sell
Moderate Sell
Current: 50.100
Low
20.15
Averages
38.72
High
55.60
Current: 50.100
Low
20.15
Averages
38.72
High
55.60
About GSK
GSK plc is a biopharma company. The Company’s segments include Commercial Operations and Research and Development. Its portfolio and pipeline are focused on developing medicines and vaccines in four core therapeutic areas, which are the areas of human health it focuses on to prevent and treat disease: respiratory, immunology and inflammation; oncology; human immunodeficiency virus (HIV), and infectious diseases. Its specialty medicines prevent and treat diseases, from HIV to respiratory diseases, immune-mediated conditions like lupus, and cancer. Its vaccine portfolio includes over 20 vaccines to protect people from diseases and infections throughout their lives. General medicines include inhaled medicines for asthma and COPD to antibiotics. It develops and commercializes preclinical antibody-drug conjugate for Metastatic castration-resistant prostate cancer. Its portfolio also includes Efimosfermin, a fibroblast growth factor 21 (FGF21) analog therapeutic in clinical development.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Trump Administration Launches Medicare Drug Price Negotiations
- Expansion of Drug Negotiations: The Trump administration has expanded Medicare drug price negotiations to include treatments administered in doctors' offices for conditions such as diabetes and HIV, affecting 15 drugs set to take effect in 2028, aiming to reduce out-of-pocket costs for beneficiaries.
- Spending Overview: According to the Centers for Medicare and Medicaid Services, approximately 1.8 million beneficiaries utilized these medications between 2024 and 2025, accounting for about $27 billion in spending, highlighting the significance of Medicare expenditures in drug price negotiations.
- Pharmaceutical Impact Assessment: Analysts indicate that for 14 of the drugs, only Gilead's Biktarvy significantly impacts the company's estimated 2027 global sales, representing around 8%, while other drugs' Medicare revenue exposure is limited to 0% to 3%, suggesting minimal overall revenue impact for pharmaceutical companies.
- Kaiser Settlement on Fraud: Kaiser Permanente has agreed to a historic $556 million settlement over Medicare Advantage fraud allegations, reflecting the government's stringent enforcement stance on Medicare fraud, which could have far-reaching implications for the industry.
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US Expands Medicare Drug Price Negotiation Scope
- Expanded Negotiation Scope: The CMS has included Medicare Part B drugs in its price negotiation program for the first time, marking a significant expansion that is expected to increase pressure on high-cost drug pricing.
- Significant Savings Potential: CMS estimates that if the negotiated prices from the second cycle had been in effect in 2024, Medicare could have saved approximately $8.5 billion in net drug costs, translating to a 36% reduction in spending across selected drugs, thereby alleviating financial burdens on seniors and taxpayers.
- Transparency in Drug Selection: CMS released a list of 50 eligible drugs for negotiation, with 15 selected based on high spending, demonstrating the agency's commitment to transparency and fairness in drug pricing, which aims to enhance public trust.
- Future Negotiation Timeline: Negotiations with participating drug manufacturers are scheduled for 2026, with any agreed prices set to take effect on January 1, 2028, providing manufacturers ample preparation time while also bringing anticipated price adjustments for Medicare beneficiaries.
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