Core Viewpoint - The article discusses the implications of President Trump's executive order aimed at reducing prescription drug prices in the U.S., highlighting potential impacts on multinational pharmaceutical companies (MNCs) and the contract research organization (CXO) sector. Group 1: Executive Order Details - The executive order mandates that U.S. drug prices be aligned with those in other developed countries, requiring pharmaceutical companies to offer "Most Favored Nation" pricing [2] - The order emphasizes that even with discounts, U.S. brand drug prices are still over three times higher than those in other OECD countries [2] Group 2: Market Reactions and Industry Perspectives - Following the announcement, while innovative drug companies saw a decline in stock prices, the CXO sector experienced an increase, indicating a shift in market sentiment [1] - Industry experts express skepticism regarding the practical implementation of the order, noting the complexity of the U.S. drug pricing system and potential conflicts with domestic manufacturing costs [2] Group 3: Impact on MNCs and CXO Services - If drug prices are significantly reduced, MNCs may seek to cut costs by increasing reliance on Chinese BD (business development) products and CXO services, as these offer cost and efficiency advantages [1][4] - The average time for new drug approval in China is 7.2 years, compared to 13.3 years in the U.S., highlighting the efficiency of Chinese biotech firms [4] Group 4: New Business Models - The potential for a new "Hybrid NewCo" model is discussed, where drug rights are licensed out while clinical development remains in China, allowing for cost-effective R&D [5][6] - This model could lead to increased collaboration between MNCs and Chinese drug companies, particularly in the context of reduced U.S. drug prices [5]

Core Viewpoint - The implementation of the "Most Favored Nation" policy by President Trump aims to reduce U.S. prescription drug prices to the lowest globally, with expected price drops of 30% to 80% [1][2]. Group 1: Impact on U.S. Drug Pricing - The "Most Favored Nation" policy is seen as a significant move to address the high costs of drug development that the U.S. bears compared to other countries, with U.S. drug prices being nearly three times the average of 33 other countries [2]. - The policy is expected to affect approximately 48% of the U.S. drug market, primarily government-funded Medicare programs, while the remaining market is influenced by commercial insurance [11]. Group 2: Reactions from the Market - Following the announcement, Chinese pharmaceutical stocks experienced declines, with companies like Bai Li Tian Heng and Zejing Pharmaceutical seeing significant drops [2]. - The policy has sparked discussions within the Chinese pharmaceutical industry regarding potential strategies to adapt to the new pricing landscape [9]. Group 3: Long-term Implications for Chinese Innovation Drugs - The policy may lead to reduced revenue for U.S. pharmaceutical companies, prompting them to be more selective in their business development (BD) transactions with Chinese firms, focusing on high-margin products [3][5]. - A new "Hybrid NewCo" model may emerge, where clinical trials are conducted in China to reduce costs, potentially increasing the attractiveness of Chinese innovation drugs to U.S. companies [6]. Group 4: Opportunities for Chinese Generic Drugs - The policy may create new opportunities for Chinese generic and biosimilar drug companies, especially in high-demand areas like monoclonal antibodies and GLP-1 drugs [7]. - However, the increased competition from U.S. generics may raise quality standards, putting pressure on Chinese manufacturers to control costs [7]. Group 5: Overall Assessment - While the "Most Favored Nation" policy may pose some challenges for Chinese innovation drugs, the overall sentiment is that it presents unprecedented opportunities for growth and development in the sector [8].