Over the course of his 2016 election campaign Trump employed populist rhetoric that enabled him to flip key states and shock much of the establishment. Trump previously condemned the pharmaceutical industry for “getting away with murder” in hiking drug prices. In recent remarks at the Rose Garden, Trump offered tepid fixes that were in line with the financial interest of major drug companies.
Merck & Co. Inc. (NYSE:MRK), one of the largest health care companies in the United States, saw its stock surge 2.8% on the same day of the speech. Health insurer Aetna Inc. (NYSE:AET) climbed 2.3% and Pfizer Inc. (NYSE:PFE) jumped 1.3%.
Trump reversed one of his campaign promises which vowed to allow US citizens to purchase cheaper drugs from abroad. The President now opposes this measure. Pharmaceutical Research and Manufacturers of America (PhRMA) has spent $10 million on lobbying in 2018 so far, and spent $26 million in 2017. Recent reports also showed that Swiss drug maker Novartis paid former Trump attorney Michael Cohen $1.2 million in “consulting” fees in 2017.
Trump went on to criticize other countries that “extort unreasonably low prices from US drug markers”. US drug companies are still making profits in other nations, just lower than in the US, which has the highest drug prices in the world.
On the same day of the speech, the House Committee on Oversight and Government Reform released a new report; “Skyrocketing Drug Prices: Year One of the Trump Administration.” The report goes on to reveal: “The three largest US-based drug companies in 2016 – Pfizer, Merck, and Johnson & Johnson – increased the prices of eight of their nine best-selling drugs in the first year of President Trump’s tenure, increasing the prices of seven of these drugs by double digits.”
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