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].