Trump pushes drugmakers for lower prices, more U.S. production
WASHINGTON/LOS ANGELES: U.S. President Donald Trump on Tuesday met with top executives from some of the biggest drugmakers, calling on them to boost U.S. production and lower prices, while he also promised to speed up approval times for new medicines.
Trump reiterated that the government was paying too much for medicines in its health programs for older, disabled and poor people and said he would soon appoint a new U.S. Food and Drug Administration leader.
At the same time, the meeting between Trump and the pharmaceutical executives signaled a defusing of tensions between the two that have kept drug stocks in check since the presidential election. Shares of most of the group rallied Tuesday following the meeting, even as the broader stock market slid.
High drug prices have become a national issue during the past two years as healthcare costs rise. Pharmaceutical stocks have seesawed since Trump was elected, rising on hopes that he would not enact changes and more recently falling on comments about what actions he might take to lower their prices.
“Trump is a populist above all else, and having these (drug) prices skyrocket, he’s commented that under his administration, this is not going to happen,” said market strategist Quincy Krosby of Prudential Financial in Newark, New Jersey.
She said Trump was playing a balancing act between controlling prices and loosening regulations. “I don’t think the majority of Americans want all regulations lifted from drug makers.”
Attending the meeting were top executives at Merck & Co, Johnson & Johnson, Celgene Corp, Eli Lilly & Co, Amgen and Switzerland’s Novartis AG as well as the head of the Pharmaceutical Research and Manufacturers of America lobbying group.
According to a transcript of the televised portion of the meeting, Amgen Chief Executive Officer Robert Bradway promised to add 1,600 U.S. jobs at his California-based biotechnology company.
Lilly and Merck said by email after the meeting that they were encouraged by Trump’s focus on innovation.
Lilly said discussion topics also included stronger trade agreements, tax reform and removing “outdated regulations that drive up costs and slow innovation.”
“Tax, deregulation – those are things that could really help us expand operations,” Lilly CEO Dave Ricks said.
Officials at the other companies did not immediately respond to requests for additional comment.
Trump told the drugmakers that pricing had been “astronomical.”
“We have to get prices down for a lot of reasons. We have no choice, for Medicare and Medicaid,” Trump said, citing the nation’s government insurance programs for the elderly, the poor and the disabled that together are the largest U.S. purchaser of medications.
Trump also said currency devaluation by other countries had increased drugmakers’ outsourcing their production, and he called on the companies to make more of their products in the United States.
Foreign countries must pay fair share for drug development costs, he added. “We’re going to end global freeloading.”
The United States typically pays more for drugs than any other developed nation.
Novartis CEO Joe Jimenez, who is chairman-elect of the industry lobbying group, said last week that he wanted to talk to Trump about efforts to develop pricing models that would pay for clinical results rather than a flat price per pill, as well as plans to replace the Affordable Care Act, which is popularly known as “Obamacare.”
Trump spooked pharmaceutical and biotech investors by saying on Jan. 11, before his inauguration, that drug companies were “getting away with murder” on what they charged the government for medicine and that he would do something about it.
Company executives, meanwhile, have tried to tread a careful line in defending their industry while expressing optimism that the United States would continue to reward scientific advances.
“Regulations – great, streamlining the FDA, perhaps,” Jack Ablin, chief investment officer at BMO Private Bank in Chicago said. “But if Trump is going to address his constituency, drug prices have to come down. So I think this is maybe a Pyrrhic victory.”