Pharma is fast becoming President-elect Donald Trump’s favorite whipping boy. Last month, Trump vowed to bring down drug prices. Last week, he slammed the industry for “getting away with murder.” And Saturday, he promised the Washington Post he’d subjugate drugmakers with the power of the tweet.
“They’re politically protected, but not anymore,” Trump told the newspaper.
Whereas Trump last week declared he’d institute competitive bidding to control the prices government programs pay for drugs, he reverted over the weekend to Medicare price negotiation, a mainstream proposal he’d backed during his campaign.
This time, the president-elect told the Post that he’d push for price negotiation in both Medicare and Medicaid, though the latter program is already entitled to pharma’s lowest prices.
Medicare is quite different. In fact, the legislation that created Medicare Part D, the popular prescription drug coverage for seniors, explicitly prohibited price negotiation. Proposals to change that rule have failed in Congress ever since.
Trump has claimed that Medicare could save $300 billion a year by negotiating drug prices. "We don't do it," he said during last year’s campaign. "Why? Because of the drug companies."
But though targeting price negotiation may be a well worn idea in Washington, Trump promises to push the idea his own way—“just like on the airplane,” he told the Post, referring to his tweets criticizing the cost of a Lockheed Martin fighter jet. The aircraft makers’ shares tanked on Trump’s social-media attack.
Trump said he didn’t care whether his public arm-twisting sent stocks reeling, as biopharma shares did last week after his vitriolic press conference.
Drug stocks, Biotech and pharma indexes turn lower after Trump discusses "new bidding procedures" pic.twitter.com/VUMn7rpFOR
— CNBC Now (@CNBCnow) January 11, 2017
The incoming president also echoed previous comments about overseas drug manufacturing—a common Trump theme, but one that’s previously been focused on car companies such as Ford Motor Co. and other equipment makers, notably the air conditioning and refrigeration company Carrier.
The U.S. “needs to get our drug industry back,” Trump said during last Wednesday’s press conference. “They don’t make them here for a large extent.” To the Post, he said drugmakers “should produce” more of their meds in the U.S.
Pharma companies manufacture many products in the U.S., but also maintain enormous production capacity overseas—some designed to serve local and regional markets, the rest to supply countries around the globe. Many generic drugs are produced in India, where cheap labor helps hold costs—and prices—down.
Trump’s latest pharma comments were part of a Post interview in which the president-elect said he was down to the “final strokes” on his plan to replace the Affordable Care Act. His plan will provide “insurance for everybody” at a much lower cost and with lower deductibles than Obamacare, the president-elect claimed.
“It’ll be another plan,” Trump said in the interview. “But they’ll be beautifully covered.”