Why NVS is down 5% pre market

The pre-market drop of 5% for Novartis (NVS) can be attributed to a combination of factors:

1. Tariff and Patent Concerns: HSBC's downgrade of NVS is partly due to potential new U.S. tariffs and the looming patent cliff, which could impact the company's earnings. The proposed 25% U.S. tariff on pharmaceutical imports could lead to a decline in earnings for innovative pharmaceutical companies like Novartis, ranging from 6% to 14%. Additionally, changes in tax rates due to tariff arrangements pose further risks to earnings.
2. Trump's Prescription Drug Pricing Plan: Novartis, along with other big pharma stocks, has experienced volatility due to President Trump's plans to cut prescription drug prices by as much as 80%. Although the administration later released clarifying comments, the initial reaction was significant, causing a decline in Novartis's shares. The uncertainty surrounding drug pricing reforms and the potential impact on revenue from key products like Entresto in the U.S. market are major concerns.

In summary, Novartis's pre-market drop is likely a result of a combination of tariff and patent concerns and Trump's prescription drug pricing plan.