On October 1, 2025, two major developments out of Washington and Wall Street sent ripples through the worlds of medicine, finance, and politics. President Donald Trump, standing at the Resolute desk in the Oval Office, unveiled a new executive order pledging $50 million in funding to harness artificial intelligence (AI) in the fight against pediatric cancer. Just as the ink dried on that announcement, European and U.S. healthcare stocks surged dramatically on news of a deal between Trump and pharmaceutical giant Pfizer to lower prescription drug prices in the Medicaid program, exchanging price cuts for tariff relief. Together, these moves signal a bold, if complex, new chapter in the intersection of American healthcare, technology, and global commerce.
"We're going to hook up the artificial intelligence with all of the other things that we have at hand," Trump declared, his optimism palpable as he addressed a group of young cancer survivors gathered in the Oval Office. "And we're going (to) come for answers and these young children who are just really, some are absolutely better and others are getting better." He turned to the children, offering a promise: "You’re all going to be better very soon." According to Euronews, the executive order doubles the National Institutes of Health’s commitment to the Childhood Cancer Data Initiative, bringing total funding to $100 million.
The aim is ambitious: gather and analyze vast amounts of medical data using AI to improve diagnoses, accelerate clinical trials, and sharpen prevention efforts for childhood cancer. While White House officials declined to specify which companies or technologies might participate, Trump suggested that the technology would eventually become widely available. "It’s gonna be so accessible to everybody," he said.
The urgency is real. Pediatric cancer, though relatively rare, remains the leading cause of disease-related death after infancy in the United States. The American Cancer Society estimates that about 9,550 children in the U.S. will be diagnosed with cancer in 2025. Globally, the World Health Organization reports that cancer affects around 400,000 children and adolescents under 19 each year. While survival rates have improved dramatically—childhood cancer mortality has fallen by more than 50% since 1975—incidence rates have crept upward since the 1970s.
Yet, as Euronews notes, pediatric cancer research remains chronically underfunded, representing less than 10% of the federal cancer research budget. The Children’s Cancer Foundation has repeatedly highlighted this gap. Trump’s new funding comes amid a backdrop of broader cuts to federal science funding during his administration. In recent years, hundreds of scientists have been removed from the federal payroll, and several hundred million dollars in grants—including some supporting pediatric cancer studies—have been canceled. The Pediatric Brain Tumor Consortium, a national network providing children access to experimental treatments for over 25 years, was informed in August 2025 that it would no longer receive federal support. Earlier budget drafts had even proposed slashing the National Cancer Institute’s funding by more than a third, though those cuts remain under negotiation. The American Cancer Society Cancer Action Network has warned that the proposed cuts "will set this nation back dramatically in our ability to reduce death and suffering."
Meanwhile, the pharmaceutical industry found itself thrust into the spotlight for a different reason. According to Reuters, European and U.S. healthcare stocks soared following the announcement of a deal between Pfizer and the Trump administration to lower prescription drug prices in the Medicaid program. In return, Pfizer was granted relief from tariffs that had been squeezing the industry’s expansion plans. The agreement, seen as less punishing than many in the sector had feared, offers a degree of clarity after a tumultuous year marked by Trump’s aggressive campaign to lower U.S. medicine prices.
Trump had sent letters in July 2025 to 17 leading drug companies, demanding they slash prices to match those paid overseas, and requested binding commitments by September 29. Pfizer was the first to announce a deal, and industry watchers expect other companies to follow suit. Lucy Coutts, investment director at JM Finn, told Reuters, "We expect EU pharma to follow suit and negotiate with the Trump administration for exemptions," suggesting this could take the form of investment in U.S. manufacturing and participation in TrumpRX, a new website being launched for Americans to buy drugs at a discount.
The impact on markets was immediate. Europe’s healthcare sector index closed 5.3% higher on October 1, marking its largest one-day gain since November 2008. Analysts at Shore Capital and HSBC both noted that the deal brought relief to a sector that had been bracing for much harsher measures. "The announcement yesterday offers some relief to the market," HSBC analyst Rajesh Kumar said. "(It) may suggest that the deals are now being closed with the U.S. administration offering a path for resolution of the overhang."
Pharmaceutical companies including GSK, AstraZeneca, Roche, Merck KGaA, Novo Nordisk, and Novartis have all confirmed they are in talks or constructive conversations with the Trump administration regarding drug pricing and manufacturing commitments. Roche and its U.S. unit Genentech reiterated their commitment to strengthening U.S. manufacturing and making medicines more affordable. Novo Nordisk, the Danish firm behind the popular Wegovy weight-loss injection, said it was in discussions over the "most-favoured-nation" executive order. Novartis echoed its commitment to finding solutions that lower costs for Americans and address price disparities with other high-income countries.
Analysts at Berenberg estimate that a 50% reduction in Medicaid sales—which account for about 3% of large pharma revenues—would hit sector earnings per share by an average of 4%, with GSK taking the biggest hit at around 7% and Pfizer the smallest at about 1%. Bernstein analyst Florent Cespedes noted that European firms have announced approximately $200 billion in U.S. investments, suggesting that companies investing in the U.S. should be "on the safe side." Angelo Meda, head of equities at Banor SIM in Milan, observed, "2025 was meant to have been a year of expansion for drugmakers, but this had been hit by tariffs. The deal was a relief. Any positive news on that front can breathe new life into a sector that is currently trading at relative lows compared to the broader market."
As the dust settles, the pharmaceutical industry finds itself at a crossroads. The promise of AI-driven breakthroughs in pediatric cancer, backed by new federal funding, stands in contrast to ongoing concerns about science funding and the fate of research networks. Simultaneously, the Trump administration’s deal-making on drug prices and tariffs is reshaping the global pharmaceutical landscape, offering potential gains for patients but raising questions about the future of innovation and investment.
For families facing childhood cancer, the hope is that these policy shifts will translate into real progress—smarter treatments, faster cures, and a healthcare system that works for all. For the industry and investors, the coming months will reveal whether this new era of negotiation and technological ambition can deliver on its promises without sacrificing the hard-won gains of recent decades.
