The fall in big pharma stocks more or less across the board yesterday is due not so much to what the Trump administration is doing as what it might do next. The US government has called off its plans to ban the rebates drug companies pay to pharmacy benefit managers in the Medicare and Medicaid programmes, which is, in itself, pretty neutral for drug companies – and is great news for insurers, many of which own PBMs and which are trading up on the news. The danger for pharma is what the government might do instead: one possibility is that a previously shelved plan to link US drug prices to an index of prices paid in other developed countries, which are generally much lower, might be reanimated. This would hit hard. As an example, an analysis by Bernstein found that if US prices for Novo Nordisk’s key insulin and GLP1 products – which are currently three or four times higher than the European prices – were to be limited to 25% above European levels, the company’s profits would fall by approximately 40%, assuming no change in market share. Novo’s shares were down 3% yesterday.