“When big pharmaceutical companies’ stocks spike during your big reveal on lowering prices, you’re doing something wrong.”
In a strong indication that investors and major pharmaceutical companies know President Donald Trump’s newly unveiled drug plan “will do nothing to rein in their greed,” Big Pharma stocks soared on Friday as Trump delivered a brief and extremely vague speech promising to lower drug costs that critics called a “cover-up for the sweetheart deal” he’s offering America’s price-gouging drugmakers.
— Axios (@axios) May 11, 2018
“When big pharmaceutical companies’ stocks spike during your big reveal on lowering prices, you’re doing something wrong,” Brad Woodhouse, campaign director of Protect Our Care, said in a statement following Trump’s speech on Friday. “Don’t be fooled: President Trump and his administration are bought and paid for by Big Pharma.”
Topher Spiro, a senior fellow at the Center for American Progress, argued that a major reason pharma stocks rose as Trump formally announced his plan is because the president placed blame for high U.S. drug prices on the low prices in nations with “socialized healthcare”—exonerating American drug giants from any blame for soaring costs.
Instead of tackling high U.S. prices, Trump effectively promised to work to “boost prices abroad,” which is the drug industry’s “number one priority,” Spiro notes.
Why are Big Pharma stocks way up? Trump is promising their number one priority: trade deals that boost prices abroad. And virtually nothing touching U.S. prices.
— Topher Spiro (@TopherSpiro) May 11, 2018
As Public Citizen noted in a series of tweets responding to Trump’s speech, the notion that low drug prices overseas produce high prices in the U.S. is a Big Pharma talking point that is “completely untrue.”
“In fact, lower prices overseas help keep prices down in U.S., by benchmarking more reasonable prices,” Public Citizen noted. “Countries are not ‘cheating,’ they are just taking modest measures to restrain Big Pharma ripoffs.”
Crafted with the help of former pharmaceutical executive and current Health and Human Services Secretary Alex Azar, Trump’s plan represents a total departure from the president’s campaign-trail rhetoric promising to take on drug giants that are “getting away with murder.”
Most notably, Trump’s plan would not allow Medicare to negotiate drug prices, a widely popular policy that the president once claimed to support.
“They refuse to take meaningful action on skyrocketing drug prices, broke their promise to allow Medicare to negotiate lower drug costs, and all while showering drug companies with record tax breaks,” Woodhouse of Protect Our Care concluded. “Sadly, it’s ordinary Americans who will continue to pay the price for Trump’s broken promise.”