US President Trump got right down to it with Big Pharma CEOs: “We have to get prices down, for a lot of reasons. We have no choice. For Medicare, for Medicaid, we have to get the prices way down, so that’s what we’re going to be talking about.”
On Tuesday, a number of CEOs were in attendance of Trump’s listening session with pharmaceutical industry leaders: Ken Frazier of Merck (NYSE:MRK), Joe Jimenez of Novartis (NYSE:NVS), David Ricks of Eli Lilly (NYSE:LLY), Alex Gorsky of Johnson & Johnson (NYSE:JNJ), Robert Bradway of Amgen (NASDAQ:AMGN), Mark Alles of Celgene (NASDAQ:CELG), and Stephen Ubl, head of the Pharmaceutical Research and Manufacturers of America (PhRMA).
Trump’s focus on pricing and regulations
At the meeting, Trump focused on drug pricing, cutting regulations, streamlining the US Food and Drug Administration, and bringing operations back to, or keeping operations in the United States.
According to Trump, “We have to make progress back. We’re going to get rid of a tremendous number of regulations.” He vows to start this by bringing in “a fantastic person” to make the FDA process quicker.
For his part, Ubl shared that the meeting was positive and productive.
We believe @POTUS agenda on taxes, trade & regulations could create 350,000 American jobs over 10 years due to biopharma industry growth 2/3
— Stephen J. Ubl (@steveubl) January 31, 2017
Reuters wrote that after the meeting, Celgene, Lilly, Merck and Amgen said by email that they were encouraged by Trump. Lilly CEO Dave Ricks said that Trump’s focus on tax and deregulation would help expand operations.
Investors have responded positively — the iShares NASDAQ Biotechnology Index (NASDAQ:IBB) was up by nearly 2 percent on Wednesday morning.
The trading week started with markets in the red due to a controversial immigration and travel ban, so the meeting with big pharma executives has been a welcome respite.
Trump has not named his FDA nominee yet, but Bloomberg wrote that Jim O’Neill is a possible candidate. O’Neil is no stranger to government service — he served as principal associate deputy secretary at the Department of Health and Human Services during the George W. Bush administration. He was also managing director at Mithril Capital.
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Securities Disclosure: I, Pia Rivera, hold no direct investment interest in any company mentioned in this article.