Donald Trump’s victory in the presidential race, often cited as a boon to free-market health care, doesn’t mean drugmakers are free of scrutiny over prices, an industry leader said.
U.S. pharmaceutical shares rose after the defeat of Democratic candidate Hillary Clinton, who had vowed to go after companies’ “gouging.” Yet if more pricing scandals emerge like the one that beset Mylan’s EpiPen, President-elect Trump could be more “vicious” than Clinton, Allergan Chief Executive Officer Brent Saunders said Thursday.
“I worry today that the pharmaceutical industry has a very false sense of relief or security because of a Trump administration and Republican-controlled Congress,” he said at the Forbes Healthcare Summit in New York. “To think that President-elect Trump isn’t a populist, that he won’t jump on the next EpiPen scandal and tweet more than Hillary Clinton tweeted or anyone else, because he’s a prolific tweeter, you’re fooling yourself.”
Over the past 18 months, drug companies like Mylan and Valeant Pharmaceuticals International Inc., along with pharmaceutical executives such as Martin Shkreli, have become symbols of rising health-care costs. Mylan CEO Heather Bresch, who also spoke at the conference, defended the price of EpiPen, saying that the company invested in the emergency allergy shot’s design and increasing access.
“The next big scandal will revive the debate and probably then some,” Saunders said. As president, Trump “will be more vicious, more focused, on taking down whoever does something again.”
Trump hasn’t been shy about attacking firms to force changes and score political points. He’s claimed victory for pushing Carrier Corp. to keep 1,000 jobs in the U.S., rather than moving them to Mexico, for instance.
And attacking rising drug prices had been a bipartisan venture. Hearings that brought executives like Shkreli and Mylan’s Bresch to Washington over the costs of their products were called by Republicans. During his campaign, Trump criticized the high cost of prescription drugs, saying individuals should be allowed to import cheaper pharmaceuticals from abroad. His transition website, though, doesn’t mention drug costs.
Vermont Sen. Bernie Sanders has been a foe of high drug prices as well, slamming firms on Twitter and campaigning in California for an unsuccessful ballot measure that had promised to lower drug costs in that state. Clinton, meanwhile, last year sent the Nasdaq Biotechnology Index into free fall with a single tweet denouncing “price gouging.” In August, Mylan’s shares plummeted minutes after she called for lower prices on EpiPen.
Allergan CEO Saunders has urged the industry to do more to help patients with the cost of drugs. His company in September said it would limit price increases and would avoid “price gouging actions or predatory pricing.”
Allergan shares have slumped 39 percent this year, while the Standard & Poor’s 500 Index gained 7.6 percent, partly hurt by industrywide concerns over drug pricing and pressure on makers of generics.
While saying it’s too early to comment on Trump’s choice of Republican Rep. Tom Price of Georgia for Health and Human Services Secretary, Saunders said he’s optimistic given Price’s experience as a surgeon.
“It’s a positive for health care in general and the pharmaceutical industry in particular to have someone who has practiced medicine” in the post, he said in an interview after speaking at the conference.
Saunders said he isn’t interested in acquiring either of two Valeant units that have been involved in discussions or speculation, the Salix gastrointestinal drug business and the Bausch and Lomb eye-care division. Saunders was Bausch & Lomb’s chief executive from 2010 to 2013.
“They just don’t fit” Allergan’s strategy, he said.
(c) 2016, Bloomberg · Jared S. Hopkins, Zachary Tracer