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 In a cover story for Time magazine, which named him its Person of
the Year, Trump said: "I don't like what has happened with drug
prices."
The Republican U.S. president-elect, a wealthy real estate developer
who ran a campaign with a populist appeal, did not state in the
interview how he would reduce the cost of prescription drugs. Trump
previously has suggested he was open to allowing importation of
cheaper medicines from overseas.
Trump previously had taken aim at other industries, suggesting an
interventionist stance toward business during his presidency.
Allergan Inc Chief Executive Brent Saunders last week cautioned drug
companies against a false sense of security under Trump. [L1N1DW1Z9]
"If our industry can self-regulate on pricing, we can all focus on
investing in innovative medicines and cures and move the pricing
discussion to the back burner," Saunders said via e-mail on
Wednesday.
Trump's Nov. 8 election victory was initially a boon for drug and
biotech stocks, as investors relaxed knowing Democrat Hillary
Clinton, who had been critical of rising drug prices, had not won
the White House.
The Nasdaq Biotech Index rose as much as 12 percent in the two days
after the election.
During the past few weeks, however, pharmaceutical stocks had given
up the majority of those gains. The biotech index on Wednesday fell
more than 3 percent to its lowest level since before the election.
The NYSE Arca Pharmaceutical index of U.S. and European drugmakers
was down 1 percent on Wednesday.
Chris Raymond, biotech analyst for Raymond James, said investors
were unsure of how seriously to take Trump's latest comments.
"Nobody that I have talked to who is an institutional investor has
said that they are selling based on this," he said.
Continually rising drug prices have placed a heavy burden on
consumers, many of whom cannot afford their medicines or face
increasing co-pays on prescription drugs. Trump has vowed to repeal
and replace President Barack Obama's signature 2010 healthcare
reform law, but that pledge does not address drug prices.
PhRMA, the largest pharmaceutical industry trade group, in an
e-mailed statement said government mandates and interventions are
not the solution for patients when it comes to medicine costs.
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"If the drug companies think that they're going to continue to have
free rein to set and raise drug prices because of Trump, I think
they're deluding themselves," said Erik Gordon, professor at the
University of Michigan Ross School of Business. "Nobody who voted
for him is in favor of high drug prices."
CARS, PLANES, THEN PHARMA
The pharmaceutical industry is the latest targeted by Trump. On
Tuesday he took aim at a leading aerospace company, urging the
government to cancel an order with Boeing Co for a revamped version
of the presidential plane due to its extremely high cost.
He previously targeted the auto industry, vowing to block Ford Motor
Co from opening a new plant in Mexico and threatening to impose
tariffs on cars shipped back across the border.
The heads of those companies have sought direct discussions with
Trump.
Jeff Jonas, a portfolio manager with Gabelli Funds, said Trump has
brought the idea of drug pricing reform back to life, but added,
"I'm still skeptical that anything actually passes through Congress,
but the overhang is clearly going to continue."
Len Yaffe, who manages StocDoc Partners healthcare fund, said that
"companies that succeed in bringing transformative medicines to the
market will continue to command a premium price."
(Reporting by Lewis Krauskopf and Bill Berkrot; Additional reporting
by Ransdell Pierson, Rodrigo Campos and Chuck Mikolajczak in New
York; Editing by Caroline Humer and Will Dunham)
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