KEY TAKEAWAY: Mr Trump’s plan to curtail drug prices was long on slogans and short on substance. To understand who the winners were just follow the money via Wall Street.
Officials representing drug companies suggested privately they were relieved to avoid harder blows from the plan, after a lot of lobbying money and effort.
Shares of drug stocks rose after the president’s speech, with Merck & Co. up 2.8% and Regeneron Pharmaceuticals Inc. up 6.2%. The Nasdaq Biotechnology index rose 2.7%, outpacing the broader Nasdaq index, which was down slightly. Shares of industry middlemen also rose, with Express Scripts Holding Co. up 2.6% and CVS Health Corp. up 3.2%.
In 2018, so far, spent $84 million in lobbying dollars with PhRMA the biggest contributor at over $10 million. This is proof that big money works well for big pharma and that patients, on the whole, are trying to fight a system rigged with lots of money.
What does all this mean? It means that drug pricing is sure to become a hot issue during the next election(s). It means that, even though prescription drug prices are only 11 cents of each health care dollar spent, that pharma marketing is not really going to be effective because people don’t trust the messenger.
Pharma companies, and the current administration, must think people are stupid. The Internet has made us all smarter and we are on the side of the media who feel that the drug industry got away with another one.