Trump Sinks Pharma Stocks on Medicare Drug Price NegotiationCécile Daurat and Toluse Olorunnipa
‘He’s for it, yes,’ spokesman says at press briefing
Stocks slump, then pare losses as investors ponder position
President Donald Trump supports Medicare drug price negotiations, his spokesman said Tuesday, remarks that sent pharmaceutical stocks swinging again as investors tried to assess whether drugmakers will be forced into bidding wars for government business.
“He’s for it, yes,” White House spokesman Sean Spicer said at a press briefing in response to a question asking to clarify Trump’s position on the matter.
Trump has given conflicting signals in the past weeks on whether he would let the government intervene directly in drug prices to reduce health-care costs. The Medicare program for the elderly is the biggest purchaser of health services in the country, and bidding for its business could have a major impact on Big Pharma’s profits. Unlike most countries in the world, the U.S. doesn’t directly regulate medicine prices, and drugmakers have strongly resisted it.
“The easier way to look at this is to look at what other countries have done: Negotiating costs to keep those down,” Spicer said at the briefing. The rising costs of health care and prescription drugs are a “huge burden” on seniors, he said.
The Nasdaq Biotechnology Index fell as much as 0.8 percent in the moments after Spicer’s remarks. The gauge pared the decline and was down 0.4 percent at the New York close. The Standard & Poor’s 500 Health Care Sector Index was little changed.
Spicer’s comments took investors by surprise because Trump appeared to have backed down from the idea last week after a meeting at the White House with top pharmaceutical CEOs. Although the president said at the time that competition was key to lowering drug prices, which he called “astronomical,” he also added that he was against price fixing.
“My new thing is going to be pharma, because we pay too much,” Trump said in a Fox News interview that aired Tuesday night. “We are the largest drug purchaser in the world, and they don’t negotiate.”
The Pharmaceutical Research and Manufacturers of America lobbying group declined to comment on Spicer’s remarks.
Pharmaceuticals stocks had plunged last month when Trump, then president-elect, made a surprise attack against the industry and suggested price negotiating to save the government billions of dollars. Until then, drugmakers had seen the businessman-turned-president as a friend of the industry.
Trump also has made conflicting comments about how and when he plans to replace Obamacare, whose dismantling was one of his campaign’s top priorities. The president said Sunday that the process to come up with a replacement for the Affordable Care Act could stretch into next year, a longer period then he previously indicated. Republican lawmakers are facing major challenges to undo the massive law, which has brought coverage to 20 million people since it passed in 2010.
— With assistance by Caroline Chen, Justin Sink, Anna Edney, and Zachary Tracer