Historical Stock Chart
2 Years : From Mar 2016 to Mar 2018
By Joseph Walker
Donald Trump attacked the pharmaceutical industry on Wednesday in his first press conference as president-elect, accusing drugmakers of "getting away with murder" and pledging to "save billions of dollars" by changing how the U.S. purchases drugs.
"Pharma has a lot of lobbies, a lot of lobbyists and a lot of power," Mr. Trump said. "And there's very little bidding on drugs. We're the largest buyer of drugs in the world, and yet we don't bid properly. And we're going to start bidding and we're going to save billions of dollars over a period of time."
Mr. Trump's comments rattled the stock market, and shares of drugmakers fell sharply. The Nasdaq Biotechnology index fell 3% in midafternoon afternoon trading. Shares of Pfizer Inc. were down 1.7% and Bristol-Myers Squibb Co. declined 4.9%.
Drugmakers are under increasing political scrutiny for their aggressive pricing of prescription drugs, which cost the U.S. health-care system $324.6 billion in 2015, a 9% increase from the prior year, according to the Centers for Medicare and Medicaid Services.
In response to Mr. Trump's remarks, the drug industry's main trade group said that the U.S. already has a competitive marketplace for purchasing drugs, where private health insurers negotiate lower prices.
"We look forward to working with the new administration and Congress to advance proactive, practical solutions to improve the marketplace and make it more responsive to the needs of patients," the Pharmaceutical Research and Manufacturers of America, said.
Mr. Trump's relatively brief remarks on Wednesday, made early during a press conference focused on other topics, didn't include any new policy proposals or a timeline for when he would pursue the changes. It is unclear how important a priority drug prices will be for the new administration, and whether he will win backing from the Republican-controlled Congress.
While Mr. Trump said on Wednesday that the U.S. would become more aggressive in bidding for drugs, it was unclear what that would entail. "The other thing we have to do is create new bidding procedures for the drug industry because they're getting away with murder," Mr. Trump said.
Mr. Trump said during his presidential campaign in January 2016 that he supported allowing Medicare, which covers prescription drugs for seniors and the disabled, to directly negotiate prices with drugmakers -- something it is currently barred by law from doing. The pharmaceutical industry is deeply opposed to the government negotiating drug prices, which it views as akin to price controls.
Mr. Trump called the drug industry "a disaster," and chided it for not manufacturing enough of their products in the U.S. and moving to overseas locations. "They're leaving left and right. They supply our drugs, but they don't make them here, to a large extent," Mr. Trump said.
Mr. Trump's victory over Hillary Clinton in November was initially seen as positive for the drug industry, a frequent target of Mrs. Clinton's during her campaign, and drug stocks soared after the election. But Mr. Trump's remarks on Wednesday signaled that he may be more antagonistic to the industry than it first thought.
Write to Joseph Walker at email@example.com
(END) Dow Jones Newswires
January 11, 2017 16:02 ET (21:02 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.