Trump tweet on drug prices sends pharma stocks lower
Pharmaceutical company stocks fell Tuesday after President Trump tweeted an updated vow to lower drug costs for Americans.
"I am working on a new system where there will be competition in the Drug Industry," Trump tweeted shortly before 9 a.m., repeating earlier promises on the issue. "Pricing for the American people will come way down!"
Trump has not yet provided any specifics on his plans to reduce drug costs for consumers. He is widely expected to use the government's vast buying power to force the pharmaceutical industry to compete on prices.
His latest criticism of pharmaceutical industry prices reprised a similar attack during his initial presidential press conference in January. "They're getting away with murder," he said at the time.
Investors, who hammered drug stocks back then, again sold off pharma industry shares on Tuesday. The declines, which were greater earlier in the session, moderated as the afternoon wore on.
Shares of Mylan, (MYL) the drugmaker criticized last year for hiking prices on its EpiPen medication injector for allergy sufferers, fell 1.6% to close at $43.33.
Shares of Amgen (AMGN) fell 1.2% to $177.38. Robert Bradway, CEO of the California-based company, was among drug industry executives at a White House meeting in January during which Trump pledged to increase "competition and bidding wars big time."
Shares of Perrigo (PRGO) a leading supplier of generics and over the counter medications, slipped 1.8% to $70.25.
Pfizer (PFE) and Allergan (AGN), the companies who scrapped their $160 billion tax-saving merger plan last year amid Obama administration opposition, both saw their stocks dip Tuesday after Trump's tweet. Allergan shares fell 1.1% to close at $239.60, while Pfizer shares slid 1.1% to $33.98.
Similarly, investors sent Eli Lilly (LLY) shares down 1.3% to $82.74. Merck, (MRK) which was also represented when Trump met with industry leaders, dropped 0.8% to close at $65.94.
Some of the companies have previously announced efforts to hold down drug price increases.
Allergan CEO Brent Saunders outlined a new "social contract" with patients who rely on the company's medications in a September blog post that referred to public criticism of industry "outliers who have taken dramatic price increases — or engaged in what the public thinks of as price gouging, especially on life-saving medicines."
Similarly, Johnson & Johnson in January said it would soon issue a new transparency report that would include "expanded disclosures on U.S. pricing and value," along with expenses for research and development and marketing. The company's shares rose 11 cents to close Tuesday at $123.82.
"I think it's incumbent upon us as an industry to price responsibly," Johnson & Johnson CEO Alex Gorsky explained during a conference call with investors.
Follow Paste BN reporter Kevin McCoy on Twitter: @kmccoynyc