Republicans and Democrats unite with Trump on pledge to lower drug prices. Is it just talk?

Elijah Cummings
Democratic Rep. Elijah Cummings reiterated his willingness to work with President Trump and Republicans to lower drug prices. (AFGE/CC BY 2.0)

Some Wall Street analysts who cover Big Pharma have been warning investors for months that if politicians on both sides of the aisle join President Donald Trump in his push to lower drug prices, the pharmaceutical industry could lose the pricing power it relies upon to drive earnings growth.

That scenario is starting to look more and more possible in the wake of dueling U.S. House and Senate hearings on drug pricing on Tuesday.

The House’s hearing was held by the Committee on Oversight and Reform, which is led by Rep. Elijah Cummings (D-Md.), a longtime critic of high drug prices. The hearing came just two weeks after Cummings launched a probe of 12 drugmakers, sending them letters demanding information on price increases, research investments and “corporate strategies to preserve market share and pricing power.”

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Cummings kicked off the meeting by declaring (PDF) “there is a strong bipartisan consensus that we must do something to rein in out-of-control price increases. Even President Trump has said that drug companies are ‘getting away with murder.’ But tweets are not enough—we need real action and meaningful reforms.”

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Rep. Mark Meadows, R-N.C., said during the event that he had a message from Trump to convey to the committee. “He wanted me to make sure that you knew that on this particular subject, not only is he serious, he's serious about working in a bipartisan way to lower prescription drug prices and when I spoke to him last night he wanted to make sure I conveyed that to you,” Meadows said, as quoted by CNBC and several other media outlets.

"We are willing, able and ready to work with them to get them done," Cummings responded.

Bernstein analyst Ronny Gal is among the industry analysts who have been watching the proceedings in Washington closely, and he recently speculated that Trump would view newly introduced drug-pricing bills as an opportunity to reach some sort of bipartisan agreement on the subject. After Tuesday’s proceedings, Gal said, “so far it’s interesting but still just talk,” when asked for a comment by FiercePharma.

Perhaps, but the growing volume of that talk worries other analysts, including David Maris of Wells Fargo. He sounded an alarm back in July, when Twitter-shamed Pfizer delayed price hikes on 40 drugs. (Pfizer was criticized for its muted response and later blasted by Trump again for hiking those prices in January.)

RELATED: Will Trump team with Democrats to tweak the latest pricing bills? Maybe, analyst says

“We believe the administration’s and other key legislators’ focus is not only on drug pricing, but on the overall supply chain and delivery system, including drug rebating, copay coupons, etc.,” Maris wrote in a note to investors over the summer. He followed up that warning in November with a prediction that this year would usher in “a very healthcare-focused Congress with intensifying uncertainty during the next presidential election cycle.”

Maris named Cummings specifically as the major force who would ensure “that drug prices and healthcare will stay a hot topic.”

Democrats and Republicans have already teamed up on other initiatives related to drug pricing this year. U.S. Representatives Peter Welch, D-Vt., and Francis Rooney, R-Fla., said earlier this month that they fear the megamerger of Bristol-Myers Squibb and Celgene will cause drug prices to rise, and they’re asking the Federal Trade Commission and Department of Justice to scrutinize the deal.

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