Drug Stocks Plunge as Trump Threatens to Force Price Bidding

[Millwright]

Pharmaceutical and biotech stocks plummeted after President-elect Donald Trump said he’d force the industry to bid for government business, a position that aligns him with congressional Democrats and against the powerful drug-manufacturing lobby.

“They’re getting away with murder,” Trump said at a press conference in New York. “Pharma has a lot of lobbyists and a lot of power and there is very little bidding. We’re the largest buyer of drugs in the world and yet we don’t bid properly and we’re going to save billions of dollars.”

The industry is the latest target of a president who’s made a habit of negotiating via Twitter. The Nasdaq Biotechnology Index fell 3 percent in New York, and the Standard & Poor’s 500 Pharmaceuticals, Biotechnology & Life Sciences Index dropped 1.7 percent, the biggest one-day drops for the indexes since October.

Investors had been betting that Trump would be good for the industry -- drug and biotech stocks had gained since his election -- but it now appears the Republican may take up the banner Democrats carried during the campaign and lock onto drug prices as an issue that hits many Americans in their wallets.

Bristol-Myers Squibb Co. dropped 5.3 percent to $56.80 in New York, the steepest decline in three months. Novo Nordisk A/S fell 5.2 percent to 242.10 kroner at 10:25 a.m. in Copenhagen trading. And Dr. Reddy’s Laboratories Ltd. lost as much as 3.3 percent in Mumbai.

Democrats have supported having Medicare, which covers the elderly and disabled, negotiate prices directly on behalf of patients, while defending against such a program has been a priority for the drug lobby in Washington. Medicare is the biggest purchaser of drugs and medical services in the country.
Test Vote

“It’s a policy we ought to consider,” House Minority Whip Steny Hoyer, Democrat of Maryland, told reporters Wednesday. “But as you know, Republicans have not been open to that consideration.”

Senator Bernie Sanders, a Vermont Independent, tweeted that Trump is right about the pharmaceutical industry getting away with murder. “But do Trump and Republicans have the guts to police drug companies and lower prices?” he asked.

The Senate plans a test on the issue this week. The chamber will likely vote on an amendment to the 2017 budget resolution backing the government’s ability to negotiate drug prices on behalf of Medicare. The amendment, from Senator Amy Klobuchar, a Democrat from Minnesota, is meant to see where senators stand on the issue. Another amendment up for a vote, from Sanders, would let drug distributors and pharmacists import lower-priced medicines from Canada and other countries and sell those drugs to Americans.
Scares People

The U.S. doesn’t directly regulate medicine prices, unlike much of the rest of the globe. President Barack Obama proposed letting Medicare negotiate prices for biologics and other expensive drugs. The government is specifically prohibited from negotiating prices with drugmakers in Medicare’s drug benefit program.

Trump’s nominee to lead the Department of Health and Human Services, Representative Tom Price, a Georgia Republican, has opposed Medicare drug price negotiation efforts in the past. He’ll likely be asked about the issue during Senate committee hearings on his nomination. The Senate health panel’s hearing is scheduled for Jan. 18, while the Senate Finance Committee, the only one that will vote on his nomination, has nothing on the calendar yet.

Heather Bresch, chief executive officer of Mylan NV, took a measured approach to Trump’s call for price bidding.

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“It would be premature to respond to any one thing” that Trump said, she told attendees at the J.P. Morgan Healthcare Conference in San Francisco. Mylan is mainly a generic drug company that also sells the EpiPen, maligned by Congress last year for substantial price increases. “The pricing model has got to change. I know that scares a lot of people. If anyone is walking away from the conference thinking business as usual, that’s a mistake.”

‘Practical Solutions’

The Biotechnology Innovation Organization, the lobby group for the biotech drug industry, said in a statement it is “eager” to work with all parties to ensure patients have access to the drugs they need and America remains the leader in the development of new treatments.

“We look forward to working with the new administration and Congress to advance proactive, practical solutions to improve the marketplace and make it more responsive to the needs of patients,” Stephen Ubl, president and CEO of Washington-based Pharmaceutical Research and Manufacturers of America, said in a statement Wednesday.

PhRMA plans an ad campaign that costs in the “high tens of millions of dollars” that will start in about two weeks to combat the negativity the industry has faced on drug pricing, Ubl said in an interview Tuesday.

During his press conference, Trump also pledged to get drugmakers -- many of which have moved their legal addresses abroad to save on taxes -- to return to the U.S.

“Our drug industry has been disastrous, they’re leaving left and right,” Trump said. “They supply our drugs but they don’t make them here, to a large extent.”

He also said Obamacare should be repealed and replaced “essentially simultaneously.”

Republican leadership in Congress has been considering a plan to repeal Obamacare by next month and work on a plan to replace it later.
Veterans Affairs

Trump also announced the nomination of David Shulkin to be secretary of Veterans Affairs. Shulkin is currently the undersecretary for health at the department and is an internist with a medical degree from the Medical College of Pennsylvania.

Trump didn’t provide specifics on his call for drug-price negotiations. During the campaign, he backed allowing them and also supported the idea of letting consumers re-import drugs from abroad. After the election, he told Time magazine, “I’m going to bring down drug prices.”

“I don’t like what’s happened with drug prices,” he said.

https://www.bloomberg.com/news/arti...nge-as-trump-threatens-to-force-price-bidding

 

[packyderms_wife]

Pharmaceutical and biotech stocks plummeted after President-elect Donald Trump said he’d force the industry to bid for government business, a position that aligns him with congressional Democrats and against the powerful drug-manufacturing lobby.

“They’re getting away with murder,” Trump said at a press conference in New York. “Pharma has a lot of lobbyists and a lot of power and there is very little bidding. We’re the largest buyer of drugs in the world and yet we don’t bid properly and we’re going to save billions of dollars.”

Aligns him with tens of millions of americans! We produce the largest amount of pharmaceuticals in the world and can't even afford the medications our country manufactures! My one inhaler the co-pay is $389 the other inhaler co-pay is $31 It's absolute highway robbery!

 

[Laurane]

FYI Canadians have lower drug costs than USA for the exact same brands, because with our Medicare, the .gov TELLS the pharma companies how much they will pay for the drug.....and it costs the same right across the country. It is up to each province to figure out which drugs they want to include in their plan (some of the newer ones are covered in some places but not in others). That way the companies know how much product (quantity) they will likely sell and how much they can discount the price.

If Trump's people tell the Pharma companies what they feel is a FAIR price and that they will possibly sell to x% of the population, then the prices should come down and be fairly even across the country.

That will lower the prices to consumers (quantity discount) as Trump says....."big time".

My DH's inhalers cost is Cdn$96 and $54 for the newest on the market......he bought the old ones in Mexico for $42.

 

[Blacknarwhal]

Senator Bernie Sanders, a Vermont Independent, tweeted that Trump is right about the pharmaceutical industry getting away with murder. “But do Trump and Republicans have the guts to police drug companies and lower prices?” he asked.

Oh Bernie. Have you not caught on by now that the one thing Trump does NOT lack is "guts"?

 

[Red Baron]

The U.S. doesn’t directly regulate medicine prices, unlike much of the rest of the globe.

Thus the American consumer is forced to subsidize the rest of the planet via our grossly inflated prices and exorbitant insurance rates just so a bunch of foreign socialists can get lowered drug prices.

I'm not a fan of direct government price controls but we can enact legislation to ensure fair domestic and international competition and to keep jobs in the U.S.

Things like allowing certified drugs to be imported from Canada and elsewhere would help to level the playing field and encourage a semblance of competition.

Prohibiting corporations from charging multiple times more for the same drug sold here should be abolished. Charge the same here as is charged in Mexico and Canada. Pathetic that our wonderful NAFTA trading partners take every opportunity to take advantage of the American consumer.

Providing tax incentives to keep drug manufacturing here in the States and penalties for those that move offshore.

There are a number of ways to deal with high drug prices. It is a shame that the drug industry has been essentially untouchable up to this point.

 

[Red Baron]

Oh Bernie. Have you not caught on by now that the one thing Trump does NOT lack is "guts"?

When has Bernie openly attacked the current administration over drug prices?

Or how about the MSM that rakes in millions from drug advertisements?

 

[Blacknarwhal]

When has Bernie openly attacked the current administration over drug prices?

Or how about the MSM that rakes in millions from drug advertisements?

Never, I believe. That would suggest Bernie has much, much less "guts" than Trump has.

 

[Hfcomms]

Drug Stocks Plunge as Trump Threatens to Force Price Bidding

He can do that with existing law by demanding that the justice department enforce anti-collusion and price fixing laws. And not only with big pharma but with all the medical services. You walk into a service station to get your vehicle fixed or any other service and you get a firm price before you agree to the deal or at least an estimate ahead of time and yet with medicines and medical procedures it's almost impossible to get a firm price ahead of time. Enforce existing law and start putting these people in jail and watch the medical costs start a downward trend. When you can get a MRI in Japan for $100 or buy generic antibiotics outside the country for less than a buck a capsule and they charge $10 or $20 here there is something desperately wrong.

 

[brokenwings]

I can't wait till our drugs are affordable like the rest of the world gets them. I have one ointment for eczema and it used to cost me $3. to have it filled years ago. Now it costs me $100!! That's for one tube that is about one ounce and the old tube is 10 oz.!!!

 

[Lurker]

Drugs. The point is being missed. Why didn't we need all these drugs years ago? Food. That's why. Take all the pollution, GMO's, chemicals, etc, out of our food and our bodies may quit falling apart years sooner than they're supposed to.

O/T .... I return the thread back to its drug pricing rant.

 

[Shacknasty Shagrat]

FYI Canadians have lower drug costs than USA for the exact same brands, because with our Medicare, the .gov TELLS the pharma companies how much they will pay for the drug.....and it costs the same right across the country. It is up to each province to figure out which drugs they want to include in their plan (some of the newer ones are covered in some places but not in others). That way the companies know how much product (quantity) they will likely sell and how much they can discount the price.

If Trump's people tell the Pharma companies what they feel is a FAIR price and that they will possibly sell to x% of the population, then the prices should come down and be fairly even across the country.

That will lower the prices to consumers (quantity discount) as Trump says....."big time".

My DH's inhalers cost is Cdn$96 and $54 for the newest on the market......he bought the old ones in Mexico for $42.

OMG, this means the Big Drugs cannot simply buy or invest in a politician and make quick big bucks.
What next??
From my point of view and interests, this is winning!!
SS

 

[Hfcomms]

Cut The Crap, Trump
[Comments enabled]

That goes for the rest of the so-called "analysts" as well.

Everyone is entitled to their opinion.

You are not entitled to your own made-up claims which you present as fact.

Again, the facts:

Last year the Federal Government spent $1,417 billion dollars out of $3,854 billion, or 37% of every dollar it spent, on Medicare and Medicaid. This was a 9.3% increase over last year's expenditure of $1,296,731 (million), all-in.

But inside this figure are even-more damning numbers.

Payments to the health care trust funds were up 13.4% (!)

Spending on CHIP, the plan for poor kids, rose last year by an astounding 56%. While the total spent was only $14.3 billion that rate of rise is utterly astronomical by anyone's measure.

Don't believe for a second that administrative expenses are under control, which is a claim often made for Medicare and Medicaid: They were up 32% last year for the primary hospital insurance trust fund. No, that's not a misprint.

Hospital benefit payments for Medicare? Up 8.4% -- the bright spot, believe it or not.

Medicare Part "D" (drugs)? Sit down: Up 26.2% to a total of $95.2 billion.

Folks, at this rate of change within the next four years Medicare and Medicaid will consume just over $2,000 billion a year, or $2 trillion -- an increase of $600 billion a year in spending.

No, it won't rise to consume that amount.

If it is attempted, and absent actual resolution that will be attempted, the federal budget and economy will detonate.

No, "bidding for drugs", as Trump said, will not fix the problem. Last year Medicare Part "D" (drugs) spent $95.2 billion. Yes, that was up 26% from the previous year, but the fact of the matter is that even if you cut that acceleration rate to zero the rest of the $1,417 billion would continue to accelerate, with hospital payments up by 8.4% last year.

You have to put a stop to all of the medical pricing games, the collusion and the rank violations of long-existing law found in the Sherman, Clayton and Robinson-Patman acts.

You cannot simply "negotiate" on the government side. I remind you that outside of prescription drugs the federal government already mandates "reimbursement rates" for medical procedures including hospital charges on both the Medicare and Medicaid programs and yet that spending went up 8.4% last year anyway.

8.4% is wildly beyond even the most-optimistic view of economic expansion under a Trump administration -- and those optimistic views are unlikely to be met. Some improvement is likely due to tax and regulatory reform but there is no way it's going to eclipse an 8.4% acceleration in spending.

Further, any attempt to do so on the "government" side for Medicare and Medicaid without forcing the private-sector side to adhere to the very same set of laws will simply cause the medical firms to shift the expense to those not on the government dole.

That's probably you.

If Trump does that then you get butt*****d. If Price manages to get balance billing into Medicare (which he has formerly advocated for and in fact tried to get passed!) then every Senior will get butt*****d and as they get older and sicker, after being forced into Medicare, they will all have their entire net worth stolen.

If Medicaid is block-granted to the states then the states will have a fixed pile of money "given" to them but the mandate for Medicaid will continue and with a ~9% acceleration in cost not matched by the block grant every single state budget will detonate within five to ten years.

Medical spending is approximately 19% of total GDP today and 37% of federal spending last fiscal year.

The only solution to the problem is to take the ~$3.5 trillion "medical industry" and make it a $1 trillion a year industry by enforcing the Sherman, Clayton and Robinson-Patman acts against each and every actor in same.

Robinson-Patman, for example, states that any commodity (physical, standardized good) that travels in interstate or international commerce cannot have discriminatory pricing applied to it between buyers of like kind and quantity. This quite-clearly applies to drugs and supplies used in medical care.

Whether you have "health insurance" does not change who the actual buyer of said drug is -- the actual consumer is you. It is therefore quite-clear that to charge one person $20 for a month's supply of a drug and someone else $500 for the same one-month supply is an obvious and blatant violation.

So-called patient assistance programs are also rank violations of Robinson-Patman.

Those programs, which are often-cited by pharama companies, discriminate against some people and for others based on their income and insurance status for a buyer of like kind and quantity of a commodity -- in this case a drug. Try charging one person $3,000 for a car and the next person $30,000 based on their car insurance company and/or income and see how long you stay out of prison. Ditto if you were to try to charge a poor person $20 to change the oil in their car and the next person, who has a $100,000 income, $200.

Likewise, Sherman and Clayton make collusive practices of any sort that intend to or do lessen competitive pressure illegal. The refusal to post a price, refusal to honor a claimed price or discriminating between consumers based on their health insurance carrier or status is quite-clearly intended to prevent meaningful shopping -- competition -- between providers of medical services (such as hospital services.)

To those who claim there is an exemption in these laws for such goods and services I challenge you to provide a citation to the law you claim exists. Mccarran-Ferguson is not a valid example of same as regards drugs, incidentally, as that has already been litigated at the US Supreme Court and it was found that "pharmacy agreements" (to fix prices and charge differential rates based on "insurance") are not "the business of insurance."

Never mind that Mccarran-Ferguson provides no shield from state anti-trust statutes (only federal) and in fact the law explicit allows for said state laws by deferring to same!

We don't need new laws -- we need vigorous enforcement of existing, 100+ year old law.

Folks, it is this issue that Trump either must address now, in the first 100 days, or the rest doesn't matter.

If you're a Trump supporter then you need to be 100% on board with this and make damn sure he is held accountable to it because if he doesn't address this specific issue in this specific fashion then the rest of his agenda literally does not matter. The federal budget will collapse and attempts to stave it off will at best buy a couple of years while forcing said collapse down on the states as well.

Again, there is no "halfway" measure that will work. The only answer is to break up all of the medical monopolies and enforce all of federal (and state) anti-trust, anti-competitive and deceptive practice laws against every medical provider, whether it be a drug company, a pharmacy, a hospital, a practice, diagnostic centers and even individual doctors.

We either do this and return health care to a $1 trillion a year industry from a $3.5+ trillion industry or this nation dies fiscally, and if you currently suffer from a chronic condition that requires ongoing medical care or pharmaceuticals there is a good chance you will die physically as well.

This is not politics.

It's math.

https://market-ticker.org/akcs-www?post=231763

 

[packyderms_wife]

Drug Stocks Plunge as Trump Threatens to Force Price Bidding

He can do that with existing law by demanding that the justice department enforce anti-collusion and price fixing laws. And not only with big pharma but with all the medical services. You walk into a service station to get your vehicle fixed or any other service and you get a firm price before you agree to the deal or at least an estimate ahead of time and yet with medicines and medical procedures it's almost impossible to get a firm price ahead of time. Enforce existing law and start putting these people in jail and watch the medical costs start a downward trend. When you can get a MRI in Japan for $100 or buy generic antibiotics outside the country for less than a buck a capsule and they charge $10 or $20 here there is something desperately wrong.

This^^^ And these same laws can be enforced with Apple, Microsoft, Google, FaceBook, and quite a few cable tv companies and cell phone service companies! Let the breaking up of the monopolies begin!

 

[Melodi]

Trump wants the US to enter the rest of the industrialized world where almost ALL other governments, no mater their political bias - NEGOTIATE drug prices with the big companies and simply refuse to pay certain insane prices on demand.

The US on the other hand, including under Obama Care; made such negotiations illegal even for States managing their medicade programs or prison health services - nope; in the US the drug companies just got to say what the price was and for the most part that was that.

While some HMO's and hospitals might have enough business to lean on them a little; the US government programs pretty much just paid whatever they were told stuff would cost and the excuse the Big Pharma companies made was that the US "HAD" to pay these prices for "research" because they "lost" so much money overseas.

I'm afraid that argument has reached the end of its rope and the US should negotiate prices especially for government programs like medicare and the like; States should be allowed to do the same thing and yes, go after the companies who don't play ball with anti-trust, anti-collusion and price fixing laws.

Because yes, they are getting away with murder; and have been for decades.

 

[night driver]

Minor issue with this, Melodi. How much DOES it take in the US to bring a drug from discovery to market these days?
I'll let you answer this as I'm on the way to an evening out. But I'll get back to you later.

 

[Siskiyoumom]

Went to fill out an RX for a new edema drug. The pharmacy refused to fill it. Blue Shield does not allow one to get that specific drug. Did not even hazard to ask the cost of the drug. The change in RX is due to the generic drug I am on causing low potassium blood levels and an increase risk of heart attack. Sheesh....taking molasses to increase my potassium level, as well as OJ and bananas. Doc never heard of the molasses remedy.

 

[BornFree]

Something they need to change is to eliminate the laws that prevent legitimate prescription drugs from being bought over seas and shipped back to the USA. You would see the prices come down real quick at that point.

 

[Shacknasty Shagrat]

Trump wants the US to enter the rest of the industrialized world where almost ALL other governments, no mater their political bias - NEGOTIATE drug prices with the big companies and simply refuse to pay certain insane prices on demand.

The US on the other hand, including under Obama Care; made such negotiations illegal even for States managing their medicade programs or prison health services - nope; in the US the drug companies just got to say what the price was and for the most part that was that.

While some HMO's and hospitals might have enough business to lean on them a little; the US government programs pretty much just paid whatever they were told stuff would cost and the excuse the Big Pharma companies made was that the US "HAD" to pay these prices for "research" because they "lost" so much money overseas.

I'm afraid that argument has reached the end of its rope and the US should negotiate prices especially for government programs like medicare and the like; States should be allowed to do the same thing and yes, go after the companies who don't play ball with anti-trust, anti-collusion and price fixing laws.

Because yes, they are getting away with murder; and have been for decades.

Excellent points, Melodi
Aside from red herrings about cost accounting, the issue, and the reasonable, free market solution is to allow negotiation.
SS

 

[momof23goats]

thank God!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

 

[Buick Electra]

Feel good news of the day!!!! And though I see your point Night Driver as it IS expensive to bring a new drug to market, a new drug that MAY have side effects of hallucinations, increased gambling, sexual, or other overpowering urges (MIRAPEX – for “Restless Leg Syndrome”); coma or death…And trouble swallowing (ABILIFY – bipolar disorder, schizophrenia); gas with oily discharge, an increased number of bowel movements, an urgent need to have them, and an inability to control them (ALLI – weight loss aid); nasal sores, glaucoma, cataracts and nasal fungal infection (VERAMYSYT – allergy symptoms); benign but dangerous liver tumors. These benign liver tumors can rupture and cause fatal internal bleeding. In addition, some studies report an increased risk of developing liver cancer (ORTHO-NOVUM – birth control pill); asthma related death (ADVAIR – asthma treatment); depressed mood, trouble concentrating, sleep problems, crying spells, aggression or agitation, changes in behavior, hallucinations, thoughts of suicide or hurting yourself; sudden numbness or weakness, especially on one side of the body, blurred vision, sudden and severe headache or pain behind your eyes, sometimes with vomiting, hearing problems, hearing loss, or ringing in your ears, seizure convulsions, severe pain in your upper stomach spreading to your back, nausea and vomiting, fast heart rate, loss of appetite, dark urine, clay-colored stools, jaundice yellowing of the skin or eyes, severe diarrhea, rectal bleeding, black, bloody, or tarry stools, fever, chills, body aches, flu symptoms, purple spots under your skin, easy bruising or bleeding, joint stiffness, bone pain or fracture (ACCUTANE – acne). https://consumerist.com/2009/04/16/9-legal-drugs-with-extremely-disturbing-side-effects/

Just LOOK at some of the CRAP they're coming out with!! Designed to kill us!!

I also KNOW right before a patent runs out on a pill, these Mafiaosos will add or take away ONE GRAIN, get a whole new patent on the pill and charge even more due to the addition or subtraction of that 1 GRAIN!

My dog had to be on Phenobarbital for his seizures. This drug has been around since before the 1940's. When my dog was initially diagnosed and put on Phenobarbital, (around 2006), it ran me $17 for 60 pills. Right before my dog had to be put down last year, I was paying $42 for 60 pills!!!

Pigs get fat but Hogs get slaughtered. These Pharma/Mafia companies weren't content with just being 'piggies,' they have been going WHOLE HOG for quite some time. Now they're going to get SLAUGHTERED by the free market. Boo-hoo! They won't be able to buy their 9th vacation get away in Switzerland and will have to be content with 2 planes instead of 4.

As I stated in my opening...FEEL GOOD STORY OF THE DAY!

 

[FarmerJohn]

Trump may be pulling the GOP to the left on health care.