Big Pharma CEOs get a face-to-face with Trump and a shot at a negotiated cease fire
On Monday, as CEOs in the biotech industry chimed in to criticize Donald Trump’s travel ban for 7 Muslim countries, the top figures from Big Pharma were notably silent. None of the CEOs of the top 10 companies offered a word of protest, and the companies that chose to say anything largely limited themselves to reassuring worried staffers of their support. Brent Saunders at Allergan was the only head of a major company to voice his disapproval.
One reason for their silence could be explained by today’s White House schedule for Trump. Right after the daily briefing, he’s scheduled to meet with PhRMA and some of its top board members. The list includes Novartis CEO Joe Jimenez, Merck’s Ken Frazier, Eli Lilly chief David Ricks, and probably Joaquin Duato, a top J&J exec who’s the new chairman at PhRMA, as well as PhRMA CEO Steve Ubl.
There’s a lot to talk about.
The drug industry has already taken a thrashing at the hands of Trump, who’s accused Big Pharma of “getting away with murder” on drug prices. In a follow-up, Trump has begun pushing to allow Medicare to begin negotiating drug prices, which could create a publicly available baseline price that would set the bar on discounts.
Currently, Medicare does not directly use its huge leverage to negotiate drug prices, and the major marketers do not want that to change. You can also expect that they’ll offer up a new commitment by a broad range of drug companies to rein in prices with single-digit annual price increases, as well as an interest in moving toward value-based pricing, as an indication of their willingness to help. And there is the prospect that Jimenez and others can talk about investing more in local manufacturing.
Trump, though, has proven to be wildly unpredictable when it comes to pharma. And he’s also proven ready to take a stand on a variety of positions to push an “America first” agenda, no matter how much controversy is stirred in the process.
The big question is what Trump may Tweet at the industry after the meeting. Clearly, none of these CEOs are willing to risk a direct broadside aimed at their company. What they’re after is a negotiated cease fire, or more hopefully peace. So don’t look for any defiance in this group. That’s not their style.