During his first president-elect news conference, Donald Trump on Wednesday accused pharmaceutical companies of being able to get away with murder because of the high cost for drugs. He added that he would change how the country bids on drugs so the prices will come down and spending is less.
Trump said that the pharmaceutical industry has a number of lobbyists and a great deal of power. He said very little bidding takes place on drugs. He called the U.S. the largest purchaser of drug worldwide, but the bidding is done improperly.
The government is forbid by federal law to negotiate with pharmaceuticals to bring the prices of drugs down for seniors on Medicare. While the president-elect came up short of announcing a plan to address this issue, he in the past has called for the policy to be ended, a proposal that lawmaker from the Democratic Party have repeatedly put forward.
That comment by Trump hit the drug industry hard during its annual investor conference in San Francisco sending biotech and pharmaceutical stocks plummeting. The Biotechnology index of NASDAQ was down 3% on Wednesday.
Mylan Pharmaceuticals CEO Heather Bresch said during a speech at the conference, that it was premature to comment about the remarks made by president-elect Trump because it is unknown what his specific plans will be.
Pharmaceutical AbbVie announced at the conference that it would temper prices of its drugs to increases annually of single-digits, following an announcement of a similar nature by Novo Nordisk and Allergan recently.
The announcement was not prompted by the comments from Trump, which came as AbbVie was giving its presentation at the conference. CEO Richard Gonzalez said that he did not have much insight into the criticism by Trump and what it would mean to the drug industry.
Allergan CEO Brent Saunders said during an interview on the phone that in a number of respects, the expected agenda of Trump and a Congress controlled by Republicans of pro-business will benefit the pharmaceutical industry.
However, he added, the public anger over the prices of drugs is a vulnerability.
Saunders has said that drug companies need to show some restraint in their pricing to avoid intervention by the government that could help to stifle the overall industry.
A bill was introduced this week in Congress by Vermont Democrat Peter Welch that would approve Medicare negotiation for drug prices.
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