Donald Trump has announced a series of high-profile deals with major pharmaceutical companies aimed at lowering prescription drug prices in the United States. The first of these agreements, with Pfizer, introduces a “most-favored nation” pricing policy, meaning that Americans will pay no more than consumers in other developed countries for certain medications. Under the deal, Pfizer will also sell select drugs directly to consumers through a new federal platform called TrumpRx.gov, expected to launch in 2026. In exchange, the company will receive a three-year reprieve from certain pharmaceutical import tariffs and will invest roughly $70 billion in U.S. manufacturing and research.
The Trump administration is now pursuing similar arrangements with other major drugmakers including Eli Lilly, Novo Nordisk, and AstraZeneca. These negotiations are expected to make popular weight-loss drugs such as Ozempic and Mounjaro available at significantly lower prices, potentially around $149 per month. Participating companies will receive tariff relief and favorable regulatory treatment in return for commitments to produce domestically and maintain transparent pricing structures. Supporters of the initiative see it as one of Trump’s most aggressive efforts to lower drug prices by leveraging trade and regulatory power. Critics, however, argue that the impact may be limited, as many Americans obtain prescriptions through insurance or Medicaid, which already negotiate discounted rates. Questions remain about how transparent and enforceable the agreements will be, and whether the program will fundamentally change how the pharmaceutical market operates once TrumpRx becomes active.
Drug Sector Builds Relative Strength Momentum Amid Policy Tailwinds
From a market and sector perspective, the Drug sector has been on the SIA watch list for several months as a relative strength gainer. While not yet a top-performing sector, certain individual stocks such as AbbVie and Johnson & Johnson have shown improvement in their respective SIA matrix rankings. The SIA Sector Scope data reveals three key indicators: bullish % direction, bullish % level, and relative strength. The sector’s bullish % level currently sits around 53–57%, one of the highest readings outside of the Bank sector, even though it remains still within the neutral zone of the relative strength reports (see breakout RS position chart). This might suggests that while short-term trends show some weakness, the overall relative strength of the Drug sector has been rising steadily since the summer of 2025 which might trump any short-term weakness.
Technical Setup Strengthens as SIA Drug Index Pushes Breakout Levels
Looking at the SIA Drugs Equal Weight Index, the 2% scaled point-and-figure chart shows a constructive uptrend following a long period of consolidation that began after the post-COVID market peak. The index pulled back to the long-term positive trend line in late 2024, before beginning a new rally. Since then, it has produced several double-top and spread triple-top breakout patterns, signaling improving momentum. Initial resistance appears around 75,373, with further resistance levels near 84,882 and 90,078. On the downside, support begins near 69,633, with a broader zone of strong support in the 53,828 to 57,123 range. The SIA Drug EWI Index currently carries a relative strength reading of 8 out of 10, indicating that the sector remains strong compared to a basket of alternative asset classes and that money flow continues to favor healthcare.
Overall, while the Drug sector is not yet leading the market, the combination of improving technical strength, constructive price patterns, and favorable policy developments could make it an area of growing opportunity. Continued progress in Trump’s pharmaceutical pricing deals, along with renewed domestic investment and regulatory incentives, could provide additional catalysts for sustained sector strength into 2026 and definately a sector to monitor closely.
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