KEY TAKEAWAY: Shares of biotechnology and pharmaceutical companies retreated after President-elect Donald Trump vowed in a magazine article to crack down on drug prices. Drug stocks fell after Mr. Trump was quoted in a Time Person of the Year article as saying: “I’m going to bring down drug prices.” Better put that champagne on ice.
I never thought that I would see a tie when Bernie Sanders and Donald Trump would agree on anything but that common ground appears to have been found when it comes to drug pricing. Drug companies are reeling from Trump’s comments. Until yesterday they seemed content to continue the same strategy of larger price increases during the coming years.
Alex Harding over at Xcompany.com said it very well “I find drug companies’ complacency extremely shortsighted. Yes, higher prices are a nice way to boost sales for the next earnings report, but public fury about the rising cost of medications is about to bubble over. Already, only 28 percent of people have a favorable view of the pharmaceutical industry , making it the second-lowest rated sector of all, just ahead of the federal government. How long will politicians continue to protect an industry that is so widely disliked by their constituencies?
Last week, Allergan Chief Executive Brent Saunders touched on the delicate politics of drug pricing at a healthcare industry conference in New York.
“I worry today that the pharma industry has a very false sense of relief or security because of a Trump administration and a Republican-controlled Congress,” Mr. Saunders said. “I think we should recognize the drug-pricing issue is a populist issue….To think President Trump isn’t a populist, that he won’t jump on the next EpiPen scandal and won’t tweet against any company that does something like that, you’re fooling yourself.”
Will pharma wake up and realize that the strategy of high drug prices is not sustainable? Some companies, who is led by the visionary CEO’s will, others are in for a very rude awakening.