Trump speech on prescription drug prices cheers pharmaceutical giants
14 May 2018
On Friday, President Donald Trump gave a long-anticipated speech on soaring prescription drug prices that made clear he will not take any significant action to address the issue, despite his populist rhetoric.
Having previously assailed the pharmaceutical industry for “getting away with murder,” in his Rose Garden remarks Trump proposed a few tepid palliatives such as increasing competition.
With his typical braggadocio, Trump framed his plan as the “most sweeping action in history to lower the price of prescription drugs for the American people.” In reality, it is entirely in line with the financial interests of the drug companies and health insurers and will do virtually nothing to stop their profit-gouging.
Trump denounced the “tangled web of special interests” that have kept drug prices high, but went out of his way to ensure that this web remains undisturbed. There will be no real effort to “derail the gravy train for special interests,” as Trump put it.
While there had been some initial anxiety among pharmaceutical investors before the speech, their concerns were quickly laid to rest. “We have not seen anything about that speech which should concern investors,” Ronny Gall, a security analyst at Sanford C. Bernstein & Company, told the New York Times. He added that Trump’s speech was “very, very positive to pharma.”
The stocks of major drug companies and pharmacy benefits managers rose immediately following the speech. Health insurer Aetna rose 2.3 percent and UnitedHealth gained almost 2 percent. Drug maker Pfizer’s shares rose 1.3 percent, while Merck’s stock increased 2.8 percent.
Trump’s plan, titled American Patients First, includes…