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Astroenica has bowed to pressure from US
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President Donald Trump to lower the cost
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of its medicines for patients in
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America. The Cambridgebased farmer giant
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said it will provide direct to consumer
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sales to eligible patients with
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prescriptions for chronic diseases at a
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discount of up to 80% off list prices.
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The firm is also getting involved with
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the US government's new direct
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purchasing program which will allow
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patients to purchase medicines at a
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reduced cash price. Astroenica said the
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move, which meets the new stringent
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requirements Trump has imposed on farmer
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businesses, would allow it to swerve any
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tariffs imposed on the sector for at
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least the next three years. But the firm
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did not set out how large a financial
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hit it would be taking from the price
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cuts. Chief executive Pascal Sorio said
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the move helped safeguard America's
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pioneering role as a global powerhouse
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in innovation and developing the next
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generation of medicines. He continued,
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"It is now essential other wealthy
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countries step up their contribution to
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fund innovation. Shareholders don't
1:00
appear to be overwhelmingly impressed by
1:02
the move with the stock falling around
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1% following the announcement. One thing
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Astroenica didn't discuss was the
1:09
financial implications of its
1:11
commitment. On the one hand, the
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commitment means the farmer giant will
1:14
swerve billions of pounds in extra costs
1:16
that it might have faced had Donald
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Trump gone ahead with plans to slap big
1:20
tariffs on the sector. But would this
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really have happened? Trump often talks
1:25
the talk, but doesn't always walk the
1:27
walk, which is why many investors have
1:29
begun using the taco acronym, meaning
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Trump always chickens out. On the other
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hand, lower medicine costs in the US
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means lower revenues from Astroenica's
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biggest market. And that has to be paid
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for by hitting other markets with higher
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fees, a bitter pill for many healthcare
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providers to swallow. It's all part of
1:47
Astroenica's pivot towards the US to
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escape the wrath of Donald Trump as he
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threatens tariffs on farmer firms. Trump
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has been a long-term critic of pricing
1:56
disparities between medicines sold in
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the US and elsewhere. In July, the firm
2:00
unveiled plans to invest as much as $50
2:02
billion in manufacturing and R&D in the
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US after ditching its UK expansion plans
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in a blow to the government's industrial
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strategy. The company said it will spend
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the huge sum over the next five years,
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including on a new manufacturing
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facility in Virginia, its largest ever
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single manufacturing investment. That
2:20
was followed in September by a decision
2:22
to upgrade its US listing by replacing
2:25
its existing NASDAQ listing of American
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depository receipts. Astrogenica said it
2:30
took the decision to give it the
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flexibility to access the broadest
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possible available pool of capital. In
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the UK, the firm has abandoned its plans
2:38
to build a450 million pound
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manufacturing plant in Murzyside,
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blaming a lack of government support.
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For everything you need to know about
2:45
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