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U.S. President Donald Trump’s executive order on drug pricing threatens Roche’s planned $50 billion investment in the United States, the company said on Wednesday. Trump’s order, signed on Monday, directs drugmakers to lower prices of brand-name medicines to align with those in other wealthy nations. Analysts and legal experts say the policy would be difficult to implement. “Should the proposed EO (Executive Order) go into effect, Roche’s ability to fund the significant investments previously announced in the U.S. will be in question,” the company said in a statement. Roche said it did not expect the executive order to affect its business in 2025, and said it would continue engaging with the Trump administration and Congress. Roche in April announced it would invest $50 billion in the U.S. over the next five years, creating more than 12,000 jobs. It is among several drugmakers, including Eli Lilly, Johnson & Johnson and Novartis, to announce large-scale U.S. investments in response to Trump’s push to onshore pharmaceutical manufacturing. Novartis, another Switzerland-based big pharma company, said on Wednesday it had no plans to alter its U.S. investment strategy in response to the executive order. “We are working both in the U.S. and Europe to advocate for necessary changes, including reducing the role of PBMs (pharmacy benefit managers) and correcting significantly low pricing in Europe,” the company said in an emailed statement to Reuters. “These discussions will take time, and we do not expect any changes to happen quickly.” In the U.S., drug prices are shaped by complex negotiations involving PBMs that act as middlemen between drugmakers and health insurers and have been criticised for inflating costs. In Europe, countries generally have public health systems that negotiate directly with manufacturers and keep costs down. Since taking office, Trump has repeatedly threatened to levy tariffs on medicines and his administration is conducting an investigation into imports of pharmaceuticals in an effort to impose tariffs on national security grounds. Maggie Fick, Reuters
Category:
E-Commerce
Results from Walmart, a bellwether for the U.S. retail industry, will offer proof on Thursday why the Arkansas behemoth is best placed to navigate the uncertainty from the Trump administration’s tariffs. Walmart is among a handful of large companies that has not either pulled or slashed its forecast. The company last month reaffirmed its annual forecast, saying “nothing in the current environment changes its strategy”. Since the announcement was made minutes before U.S. imposed a 145% tariff on China – Walmart’s largest supplier – investors will watch for any adjustment to the outlook and whether it absorbs any tariff-related costs or passes them on to customers. The world’s largest retailer has promised to keep prices low to keep its price advantage over competitors. Amazon.com, its fiercest rival, is also “maniacally focused” on lower prices and has encouraged sellers to move more inventory to the U.S. before tariffs take effect. “Many consumers are prioritizing saving money and stretching their dollar a little bit further,” Jefferies analyst Corey Tarlowe said. “They’re prioritizing what they need over what they want. So they’re trading into value-oriented retailersthat to me paints a very clear picture that’s conducive to success for Walmart.” With the U.S. and China pausing trade escalations on Monday, retailers including Walmart have had to deal with a month of elevated tariffs. Many stopped shipments from China and reached into their inventories to stock shelves. Rival Target, unlike Walmart, expects annual sales to be flat and tariffs to weigh on its results. It reports on May 21. Walmart said in February it expects profit growth to slow this year even as sales rise. It forecast adjusted earnings per share for the fiscal year ending January 2026 in the range of $2.50 to $2.60, and sales growth of 3% to 4%. At that time, Trump had imposed 10% tariffs on goods from China and 25% on goods from Mexico and Canada. “Walmart should be able to effectively manage the increase in tariffs, given its strong global sourcing operation, healthy vendor relationships, and defensive product mix,” Telsey Advisory Group analyst Joseph Feldman said. “Sales should be pretty solid and it feels like investors feel confident that Walmart will execute and operate in this environment.” Its U.S. e-commerce business will be in focus as the company has said the division will achieve profitability for the first time in the first quarter. The business has seen double-digit growth for 11 straight quarters in the U.S. and clocked 16% growth globally in the fourth quarter. It accounts for just under a fifth of Walmart’s annual revenue. The company’s paid membership program, Walmart+, is of interest for investors who want to see if it is taking customers away from rivals Amazon and Costco. Walmart’s stock has been on a tear over the past year, rising 60% to take its market value above $700 billion, and outperforming six of the so-called Magnificent Seven tech companies that led the market rally in 2023 and 2024. Only Tesla has performed better. For the first quarter, analysts polled by LSEG expect Walmart net sales to increase 2.7% to $165.88 billion and net income to fall 9% to $4.64 billion. “(Walmart’s) more favorable positioning relative to the rest of retail will probably become even more evident as the year unfolds, when the operating environment could become much more challenging,” UBS analysts said in a research note. Ananya Mariam Rajesh, Reuters Siddharth Cavale contributed to this report.
Category:
E-Commerce
California is staring down a $12 billion budget deficit, Gov. Gavin Newsom said Wednesday. The Democratic governor shared the number as he laid out his nearly $322 billion state spending plan for the upcoming fiscal year. He says the deficit is partly due to broad economic uncertainty, including ever-changing federal tariff policies and a volatile stock market. California relies heavily on revenue from a tax on capital gains. The shortfall is also due to a swelling Medicaid budget, and Newsom has proposed freezing enrollment in a state-funded health care program for immigrants in the country illegally starting in 2026 to cut down on costs. The shortfall will require difficult but necessary decisions, according to a budget document released by the administration ahead of Newsoms budget presentation. Newsom, a Democrat, kicked off his budget presentation by highlighting California’s contributions to the U.S. and world economy and blaming President Donald Trump’s economic policies for causing uncertainty that’s hindering the state. California is under assault, he said. We have a president that’s been reckless in terms of assaulting those growth engines. His decision to freeze health care enrollment for immigrants highlights Newsom’s struggle to protect his liberal policy priorities amid budget challenges in his final years on the job. California was among one of the first states to extend free health care benefits to all poor adults regardless of their immigration status last year, an ambitious plan touted by Newsom to help the nations most populous state to inch closer to a goal of universal health care. But the cost for such expansion ran $2.7 billion more than the administration had anticipated. Newsom in March suggested to reporters he was not considering rolling back health benefits for low-income people living in the country illegally as the state was grappling with a $6.2 billion Medicaid shortfall. He also repeatedly defended the expansion, saying it saves the state money in the long run. The program is state-funded and does not use federal dollars. Under Newsom’s plan, low-income adults without legal status will no longer be eligible to apply for Medi-Cal, the state’s Medicaid program, starting in 2026. Those who are already enrolled won’t be kicked off their plans because of the enrollment freeze, and the changes won’t impact children. Newsom’s office didn’t say how long the freeze would last. Starting in 2027, adults with unsatisfactory immigration status on Medi-Cal, including those without legal status and those who have legal status but aren’t eligible for federally funded Medicaid, will also have to pay a $100 monthly premium. The governor’s office said that is in line with the average cost paid by those who are on subsidized heath plans through California’s own marketplace. There’s no premium for most people currently on Medi-Cal. In total, Newsom’s office estimated the changes will save the state $5.4 billion by 2028-2029. The state must take difficult but necessary steps to ensure fiscal stability and preserve the long-term viability of Medi-Cal for all Californians, his office said in an announcement. The Medi-Cal expansion, combined with other factors such as rising pharmacy costs and larger enrollment by older people, it has forced California to borrow and authorize new funding to plug the multibillion hole earlier this year. California provides free health care to more than a third of its 39 million people. Newsom’s proposals go against the commitment the state has made to the immigrant community, said Masih Fouladi, executive director of the California Immigrant Policy Center. Questions about the practicality of the program aren’t even something that we want to entertain with, he said. The proposal just doesn’t match with our values as a state. Trān Nguyn, Associated Press
Category:
E-Commerce
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