Shares in pharma stocks took a tumble yesterday after US President-elect Donald Trump vowed to take action on drug pricing and impose greater regulation on the industry.
Trump’s comments came in an ill-tempered press conference yesterday in which he praised the US motor industry for returning production to US soil, but lambasted pharma for making medicines overseas.
Pulling no punches, he described the pharma industry as “getting away with murder” and “disastrous”, saying: “they are leaving left and right – they supply our drugs but they don’t make them here, to a large extent.”
On the thorny issue of drug pricing – which has become a hot topic in the US thanks to high-profile media and political attention – Trump said he planned to introduce new bidding procedures to keep prices at a manageable level, saying this would help save “billions of dollars” over time.
“Pharma has a lot of lobbyists and a lot of power, and there’s very little bidding on drugs,” he told reporters. “We’re the largest buyer of drugs in the world, and yet we don’t bid properly.”
Other sectors also came in for criticism, including technology and aerospace companies, and he raised the prospect of border taxes for US-based companies that produce goods overseas that are destined to be sold to American consumers.
The President-elect’s comments wiped almost $25bn off the value of big pharma stocks and have taken the industry by surprise. Pharmaceutical companies on the whole were relieved when Trump took the White House, as his opponent Hillary Clinton had made a lot of noise about cracking down on pharma during her election campaign.
Trump has already suggested that he will push to allow the Medicare healthcare system to negotiate directly with drug companies – something that is not allowed under the current legal framework – and make it easier to import medicines from cheaper overseas markets.
The chief executive of the Pharmaceutical Research and Manufacturers of America (PhRMA) trade body, Steven Ubl, said that medicines are already purchased in a competitive marketplace “where large, sophisticated purchasers aggressively negotiate lower prices”.
He insisted however that PhRMA is “committed to working with president-elect Trump and Congress to improve American competitiveness and protect American jobs”.
The Bioindustry Organization (BIO) echoed that sentiment, saying it is “eager to discuss ways in which all parties can work together to ensure patients have access to the medicines they need, that we do not limit treatment options available for patients and that America remains the global leader in the development of innovative new treatments and cures”.