On May 12, President Donald Trump followed through on a campaign promise by signing an Executive Order (EO) mandating that pharmaceutical companies lower their prescription drug prices in the US to those seen abroad.

At a media event, Trump told reporters he was aiming for price cuts of between 59% and 90% and gave drug companies 30 days to play ball.

Wall Street digested the news, and while major biopharma stocks saw share prices drop the day the EO was announced, most industry stocks rebounded.

Here are three pharma stocks that won’t just rebound, but are poised to soar because of Trump’s executive order.

Team Trump on Solid Ground?

Nobody’s denying that US drug prices are out of whack. A 2024 RAND Corporation study concluded US drug prices were approximately three times higher than those in 33 other developed countries.

Presidents have full power to order such a price cut from a private industry, at least in part.

“That’s especially the case in sectors like healthcare where government programs like Medicare are massive buyers,” said Lou Carter, founder and CEO at the Best Practice Institute in Palm Beach Gardens, Fla. “Policy isn’t just about law—it’s about leverage. This EO uses the weight of public programs to force pricing accountability, and that’s smart business when you’re managing taxpayer funds.”

Congress and the courts can try to stop the EO in its tracks, but success on that front is unlikely.

“Politically, it’s tough to argue against lower drug prices,” Carter said. “Even if pharma lobbies hard, most lawmakers know it’s political suicide to oppose something that helps seniors afford insulin. If this goes to court, it’ll hinge on procedural questions—not on whether the move is popular or right.”

Bigger Drug Makers are Hardest Hit

Given the size and scope of the EO, it’s no surprise that the more substantial drug companies may find themselves in financial trouble.

“Large-cap biotech and specialty pharma companies with heavy Medicare exposure like Amgen AMGN or Regeneron REGN could be hit hardest,” said Dr. Will Soliman, Founder and CEO of the New York City-based Accreditation Council for Medical Affairs. “They rely on high-margin (Medicare) Part B drugs.”

Vertical-oriented drug makers could also feel the heat from the EO.

“Specialized oncology manufacturers like Bristol Myers Squibb BMY have greater exposure than diversified pharmaceutical companies with broader portfolio ranges,” said Seann Malloy, founder and managing partner of Malloy Law Offices in Bethesda, Md. “Small to mid-cap biotechnology companies with early commercial products often fall outside immediate impact zones due to limited Medicare utilization and existing price protection provisions. “

“The executive order’s key element mandates that Medicare’s prescription drug payments align with the lowest prices in other developed countries, essentially using international reference pricing,” Malloy said. “While some demonstration projects will start within 30 days, full implementation across all provisions will take longer, likely 6-12 months, due to necessary regulatory development. “

Timing could play a big role in determining how much of an impact the EO will have on biotech drug stocks, if any.

Initially, the order focuses on physician-administered drugs under Medicare Part B but may later include retail prescriptions under Part D. “This staged implementation means the immediate and long-term market effects will differ, a point often missed by investors,” Malloy noted. “Despite initial impressions of swift price changes, significant revenue impacts will likely be delayed by extensive regulatory procedures.”

Additionally, overseas drug providers may face stiff headwinds from the Trump drug price directive.

“International manufacturers are most vulnerable,” said Javier Palomarez, founder and CEO of the United States Hispanic Business Council. “Many of them ship to the United States because of the return on investment – eroding that return dampens the incentive and ability to ship medicines across the world, which could lead to total loss of US market access for some companies.”

Three Drug Stocks That Bear Watching Over the Next 30 Days

Biotech investors looking to leverage the Trump EO should understand Trump’s intention to “cut out the middleman,” as he said in his May 12 press event. This translates to good news for actual drug manufacturers and not-so-good news for so-called pharmacy-benefit managers.

PBM’s act as intermediaries between health insurance companies, big employers, drug manufacturers, insurers, and patients. While they don’t produce prescription drugs, they handle the more mundane side of the drug business, like claims processing and negotiating prescription drug prices.

The big drug producers have historically blamed the PBMs for sky-high drug prices and would likely back any initiative that expands the direct-to-consumer drug marketplace. In that scenario, no insurers are needed, as drug consumers could deal directly with drug manufacturers to buy the medicines they need, presumably at a more affordable price.

Investors in that marketplace would want large drug makers, and big PBMs would not. These three drug stocks stand out on the plus side.

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Eli Lilly

Drug manufacturing giant Eli Lilly LLY is priced high at $730 per share, but it’s a stock that would likely prosper in a direct-to-consumer prescription drug marketplace. The stock is off by 5.0% year-to-date, but 26 Wall Street analysts who track LLY give it a top rating. The company’s recent earnings per share are off the charts, with an upward spike of 106% in EPS in 2024 and an estimated 68% in 2025. The stock is off 20% compared to recent highs, which could mean a nice discount for a drug industry stalwart.

Novo Nordisk

Novo Nordisk NVO has experienced market woes that preceded the Trump E/O, as competitors continue to chew into market share in the lucrative weight loss drug market. Particularly damaging was a recent study that concluded patients taking Eli Lilly’s Zepbound were losing weight faster than with Novo’s Wegovy. That’s one big reason Novo Nordisk has seen its share price fall by 50% over the past year. Yet the stock is in rebound mode right now, up 13.9% over the past month. A $2.2 billion deal between Novo and Septerna SEPN to develop weight loss pills is seen as a big step by analysts and big names like Goldman Sachs and JP Morgan are sticking to their buy calls on the stock. Meanwhile, a larger group of industry analysts is out with a consensus 50% share price upside from current levels.

AbbVie

AbbVie ABBV is a genuine cash flow producer that seems immune to any political interference from Washington, D.C. The drug manufacturer has a diverse set of popular prescription drugs, like Botox, Humira, Rinvoq, and Skyrizi. The stock only fell by a paltry 1% on the E news this week, and is up 5% over the past month. It also comes with a healthy 3.6% dividend for income-minded investors, a robust drug pipeline in play, and a brand new regulatory “green light” for its lung cancer drug Emrelis, supporting the rationale that ABBV shares should continue to climb in 2025.

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