PRESIDENT Donald Trump threw himself back into the debate over drug pricing on Tuesday, sending pharmaceutical stocks down again with a tweet promising to lower medicine costs in America.
In a tweet shortly before 9.00am New York time, Trump claimed he is working on a ‘new system where there will be competition in the drug industry’.
Mylan NV, the maker of the EpiPen allergy shot that was at the center of the public outrage over drug prices last year, declined 1.5 percent, while Perrigo Co. dropped 2.5 percent and Allergan Plc fell 1.5 percent.
Trump tweeted the morning after House Republicans unveiled their much anticipated legislation to repeal and replace the Affordable Care Act late Monday, which he also lauded on Tuesday, adding that competition will come later in the health-care rollout.
‘We are intrigued by the timing of President Trump’s tweet this morning as it followed rapidly behind the House health-care reform bill and we believe shows the administration’s continued focus on drug pricing’ said Vamil Divan, an analyst at Credit Suisse AG, in a note to clients.
The 25-member Standard & Poor’s 500 Pharmaceuticals, Biotechnology & Life Sciences Index dropped as much as 1.3 percent, the most since 11th January, when Trump said the pharmaceutical industry is ‘getting away with murder’.
The president has promised to lower drug costs several times and threatened to use the government’s buying power to force prices down, but so far has not unveiled any specifics about how he plans to do so.
The Tuesday tweet left analysts struggling to figure out what the president meant, especially as Trump has alluded to bidding in the past. Unlike most countries in the world, the U.S. doesn’t directly regulate medicine prices, and drugmakers have strongly resisted it.
Drugmakers are under maximum pressure to come up with ways to reduce prices amid outcry from members of Congress and U.S. customers. Some companies, including Allergan and Swiss giant Novartis AG, have responded with voluntary actions to cap price increases whilst Johnson & Johnson and Merck & Co. have taken measures to increase transparency about their prices.