Trump demands cuts to ‘astronomical’ drug prices – but pharma reassured
After a tumultuous first week in office for President Trump with a series of draconian measures unleased, pharma looked to be next in the firing line yesterday.
President Donald Trump called pharma industry CEOs to a face-to-face meeting at the White House and demanded they cut their “astronomical” drug prices.
However, this rhetoric was in reality counterbalanced by several much more industry-friendly messages.
These included pledges to speed up approval of new medicines and promises of tax cuts, and pharma has breathed a sigh of relief – for now.
Trump told the assembled CEOs: “US drug companies have produced extraordinary results for our country but the pricing has been astronomical for our country, we have to do better”.
“We have to get even better innovation, and I want you to move your companies back to the United States,” he said.
These promises helped to lift shares in pharma and biotech, despite Trump’s displaying only a passing familiarity with the industry and its challenges.
Trump promised that his administration was “going to be lowering taxes big league”, with a similar pledge for ‘unnecessary’ regulations.
For many, the pledge to create a bonfire of regulations and cut costs sounded like a short-term shot in the arm for US pharma, but a recipe for long-term undermining of the FDA’s ‘gold standard’ reputation.
The pharma industry had kept quiet about Trump’s hugely controversial travel ban announced on Friday, which apart from broader ethical concerns, could hit the sector’s need for global talent.
— President Trump (@POTUS) January 31, 2017
Likewise pharma’s CEOs didn’t appear eager to contradict his nationalistic, ‘America first’ approach to pharma investment – despite the fact that repatriating manufacturing jobs isn’t a realistic plan.
In attendance at the meeting were CEOs from Celgene, Bob Hugin, Merck’s Kenneth Frasier, Amgen’s Robert Brad, Lilly’s David Ricks, Novartis’ Joe Jimenez, J&J’s pharma head Joaquin Duato. Joining them was Steve Ubl, head of US industry group PhRMA.
Investors had sold off shares in pharma in recent weeks after Mr Trump promised to take on the industry, who he had accused of “getting away with murder” on drug prices.
But after the meeting, the industry leaders welcomed Mr Trump’s proposals.
“We believe if these policies are enacted, it will translate to up to 350,000 new jobs over the next 10 years as a result of growth in the biopharmaceutical industry,” said PhRMA’s Stephen Ubl.
Amgen CEO Robert Brad pledged during the meeting that his firm would add 1,600 jobs in the US – a move welcomed by Trump.
However, as with so many of his off-the-cuff policy announcements, Trump’s pledges contain contradictions, and will undoubtedly be subject to further change or even complete reversal.
For now, Trump ruled out introducing government-controlled pricing.
“I’ll oppose anything that makes it harder for smaller, younger companies to take the risk of bringing their product to a vibrantly competitive market,” he said.
“That includes price-fixing by the biggest dog in the market, Medicare, which is what’s happening. But we can increase competition and bidding wars.”
A new nominee for FDA commissioner is set to be named by the White House shortly, which will also try to push ahead with its controversial ‘reform and repeal’ agenda for the Affordable Care Act.
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