Trump's renewed broadsides on drug pricing didn't even dent biopharma this time
Late Monday President Donald Trump took his second shot at Merck CEO Ken Frazier. Clearly still rankled by Frazier’s decision to resign from Trump’s manufacturing council, the president Tweeted:
.@Merck Pharma is a leader in higher & higher drug prices while at the same time taking jobs out of the U.S. Bring jobs back & LOWER PRICES!
— Donald J. Trump (@realDonaldTrump) August 14, 2017
Trump buckled under pressure and took a direct swipe at right-wing extremists on Monday, a delayed reaction that boiled into a viral discussion over the president and his reluctance to single out the KKK and others from the bully pulpit of the presidency. But none of it satisfied the president’s critics. The big question for biopharma now was whether Trump, who’s gone dead silent on the issue of drug pricing — until yesterday — would rip back into the industry after being angered by Frazier, one of the few black CEOs in the Fortune 500.
There’s one other prominent Big Pharma CEO on the manufacturing council, J&J CEO Alex Gorsky, and the company has been unresponsive in the face of questions on Gorsky’s position on Frazier’s move, and whether he would be staying on after Intel’s Brian Krzanich and Under Armour’s Kevin Plank followed Frazier out of the group.
Another high profile break from Trump by Gorsky may well lead to a full scale renewal of Trump’s early campaign to castigate biopharma for what he termed were outrageous drug prices. But does it really matter?
Moving beyond tweets and back into volatile policy discussions after behind-the-scenes talks quietly veered into far more familiar and comfortable discussions related to value pricing and such would be unwelcome in biopharma. But Trump has gained little support in Congress for many of his related budget initiatives, like a grab for more industry support for the FDA budget or a big cut to the NIH’s work.
In the past, Trump’s broadsides shook stock prices of industry leaders. Yesterday, there was barely a ripple — and that was in the industry’s favor. The Nasdaq Biotech Index edged up 1%, Merck gained a half a point. As lawmakers become less and less likely to bow to the president’s demands on Twitter, they are highly unlikely to go along with any extreme pricing controls in pharma.
Investors are tuning out.
Most of the Big Biopharma execs will prefer to lay low, still looking for big tax cuts and a light touch on pricing. But Frazier just made it much, much less trendy to be seen at the White House. In the end, the industry may just get more of what it’s already had — headlines and tweets, but no substantive change on anything important as Congress remains largely dysfunctional.
There’s no sign that the tweets will stop. After our deadline today, there was another high-profile defection from the council — Scott Paul, president of the Alliance for American Manufacturing — and Trump was back at it.
For every CEO that drops out of the Manufacturing Council, I have many to take their place. Grandstanders should not have gone on. JOBS!
— Donald J. Trump (@realDonaldTrump) August 15, 2017