US President-elect Donald Trump did not mince words on Wednesday morning during his first press conference since November, which plummeted shares of pharmaceutical companies.
“Our drug industry has been disastrous.”
US President-elect Donald Trump did not mince words on Wednesday morning during his first press conference since November.
As Drew Armstrong of Bloomberg puts it, “If you had any doubt that Donald Trump still had the power to move markets… in a span of a few seconds, he surprised everybody at this press conference and said that the pharmaceutical market has been, quote unquote,”getting away with murder” and promising to have the US government negotiate prices on behalf of consumers.”
Immediately after, the NASDAQ Biotechnology Index (INDEXNASDAQ:NBI) and iShares NASDAQ Biotechnology Index ETF (NASDAQ:IBB) tumbled nearly 3 percent. As well, the NYSEARCA Pharmaceutical Index (INDEXNYSEGIS:DRG) also fell by a comparatively lower level of nearly 2 percent. According to Fortune, the 9 biggest pharmaceutical companies on the S&P 500, “shed roughly $24.6 billion in 20 minutes.”
“They’re getting away with murder.”
Trump’s biggest issues with the pharmaceutical industry are on overseas manufacturing and drug prices. He says, “They’re leaving left and right. They supply our drugs, but they don’t make them here, to a large extent. And the other thing we have to do is create new bidding procedures for the drug industry, because they’re getting away with murder.”
He added that despite the US being the “largest buyer of drugs in the world,” there is no bidding process. He says, “And were going to start bidding and we’re going to save billions of dollars over a period of time, and we’re going to do that with a lot of other industries.”
This does not come as a surprise, as Trump was already vocal about his stand on pharmaceuticals manufactured abroad to be sold in the US, as well as negotiating drug prices, during his campaign.
Change is coming
CNBC wrote that “Big Pharma better be ready to deal with the Trump team for real,” and “Trump wants drug prices to go down and he has the power to make life very unpleasant for the companies that don’t comply.”
Bloomberg cited that Mylan (NASDAQ:MYL) CEO Heather Bresch said to J.P. Morgan Healthcare Conference attendees on Wednesday that “It would be premature to respond to any one thing that Trump said.” She says further, ”The pricing model has got to change. I know that scares a lot of people. If anyone is walking away from the conference, thinking business as usual, that’s a mistake.”
Don’t forget to follow us @INN_LifeScience for real-time news updates!
Securities Disclosure: I, Pia Rivera, hold no direct investment interest in any company mentioned in this article.