President-elect Donald Trump on Wednesday pledged to change the way the federal government purchases prescription drugs, a dramatic warning to the drug industry that he is serious about keeping his campaign promises to address drug costs.
He gave the subject near-top billing in his first press conference as president-elect, slamming the pharmaceutical industry for overseas production and promising, in vague terms, to open up more price negotiations for medications.
“Our drug industry has been disastrous. They’re leaving left and right,” Trump said at the news conference at Trump Tower. “We have to get our drug industry coming back.”
Pivoting, he then took aim at drug prices, saying, “There’s very little bidding on drugs. We’re the largest buyer of drugs in the world and yet we don’t bid properly.”
He seemed to be alluding to plans to allow Medicare to negotiate drug prices, a topic that was part of his campaign but was more forcefully embraced by Hillary Clinton and Bernie Sanders. Critics say that negotiating for every drug would be infeasible, and that officials would be fettered by laws requiring coverage of certain protected classes of drugs.
The Nasdaq Biotechnology Index tumbled 3.4 percent after the market opened Wednesday morning, with stocks dropping dramatically immediately after Trump’s comments.
Drug stocks plunge as Trump threatens to force price bidding https://t.co/sJ6KF4f2o6 pic.twitter.com/Ig0q6mXQcK
— Bloomberg Markets (@markets) January 11, 2017
In his remarks, he president-elect said he would establish “new bidding procedures” for drug purchases.
“They’re getting away with murder,” he said, referring to drug companies. “Pharma has a lot of lobbies and a lot of lobbyists and a lot of power.”
“We’re going to save billions of dollars over a period of time,” Trump said.
The drug industry’s top lobbying group, the Pharmaceutical Research and Manufacturers of America, did not address Trump’s remarks directly in a statement. But the group said it was “committed to working with President-Elect Trump and Congress to improve American competitiveness and protect American jobs.”
While GOP leaders haven’t supported Medicare negotiations, a STAT-Harvard poll a year ago found that about 7 in 10 Americans, including two-thirds of Republicans, said the giant federal health insurance program should be able to negotiate lower prices for all prescription drugs.
Trump’s remarks also rattled investors at the J.P. Morgan Healthcare Conference in San Francisco, which is the year’s largest biopharma investment confab. The politics and pressures around drug pricing last year led generalist investors to withdraw some $7 billion in funding from the public biopharma funds and indexes, said Brad Loncar, who runs a Nasdaq-traded fund focused on immunotherapy.
“His choice of words in saying that this industry is ‘getting away with murder,’ I think, is a cheap shot,” Loncar said. “A sound bite like that has the potential to scare a lot of people away from investing in this industry.”
In his remarks, Trump said that he supported approving a replacement for the Affordable Care Act at the same time the measure is repealed, instead of repealing President Obama’s health law and then trying to come up with a replacement plan, as some congressional Republicans have proposed doing.
But the president-elect did not provide any specifics about a possible replacement plan, saying his administration would release a plan after Tom Price, his nominee for secretary of the Department of Health and Human Services, is confirmed.
Trump attacked the high premiums and deductibles that are part of some insurance plans and said his plan would make health care more affordable. But he did not say whether his replacement proposal would aim to cover as many people as the Affordable Care Act.
“We’re going to get health care taken care of in this country,” Trump said.
Meghana Keshavan in San Francisco and Andrew Joseph contributed reporting.