AstraZeneca seeks US drug price cuts amid expansion plans, strong demand

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2 days ago

By Pushkala Aripaka and Maggie Fick
(Reuters) -AstraZeneca has proposed price cuts to its drugs in the United States, its CEO said on Tuesday, days after unveiling a $50 billion investment to expand there, as President Donald Trump pressures pharmaceuticals companies to lower costs.
Speaking to journalists after second-quarter revenue and profit beat expectations, CEO Pascal Soriot said Trump's administration was reviewing the company's proposals. He did not specify which drugs were included.
Trump has repeatedly threatened tariffs as he also pushes drugmakers to reduce prices to what other countries pay. However, he signalled earlier this month that companies would be given a year to 18 months to "get their act together" before any sector-specific levies take effect.
"We definitely support the idea of rebalancing with some reduction of pricing levels in the U.S., and some increase, we're not talking about massive increases, in Europe," AstraZeneca's Soriot said.
He added he expects all medicines for U.S. patients to be produced locally within a few months, and is also considering selling some medicines to customers directly.
AstraZeneca shares rose as much as 3% after its results, but pared some gains to trade up 1.6% by 1214 GMT.
"The big uncertainty, unsurprisingly, remains U.S. tariffs and Most Favoured Nation pricing in the pharmaceutical sector. AstraZeneca has looked to get ahead of this uncertainty," said Sheena Berry, a healthcare analyst at Quilter Cheviot.
The U.S. accounted for more than 40% of AstraZeneca's revenue in 2024. The UK's largest-listed company by market value had prioritised the U.S. market - the world's largest, worth $635 billion - even before Trump's return to office.
US BOOST
AstraZeneca's efforts are paying off as strong U.S. demand, and robust sales of newer cancer, heart and kidney disease medicines drove total revenue for the second quarter 11% higher to $14.46 billion, on a constant currency basis.
It logged double-digit growth in the U.S. despite headwinds from changes in U.S. Medicare price negotiations, while sales of cancer drugs including Tagrisso, Lynparza, Calquence, Truqap and Imfinzi beat expectations.
Core earnings stood at $2.17 per share. Analysts were expecting $2.16, from $14.15 billion in sales, according to a company-provided consensus.
AstraZeneca is betting on a wave of expected launches of 20 new medicines and its U.S. expansion to reach $80 billion in annual revenue by 2030 and offset generic competition. On Tuesday, it maintained its 2025 outlook and increased its interim dividend by 3%.
The drugmaker in April forecast only a limited impact from potential U.S. tariffs, adding it would be able to meet its annual outlook if the levies on European imports were similar to those in other industries.
A European Union-U.S. trade deal over the weekend will result in a 15% tariff on most goods, including pharmaceuticals, from the region.