In the past year, lawmakers have held hearings and launched investigations into runaway drug prices for everything from an anti-AIDS medication to the EpiPen. Diabetes advocates had hoped the insulin industry would be the next to find itself in the crosshairs, as both Hillary Clinton and Donald Trump made overtures on the campaign trail about controlling drug prices. Those hopes were further buoyed by a November 4th letter by Vermont Senator Bernie Sanders and Maryland Representative Elijah Cummings asking the Justice Department to investigate whether insulin makers colluded to drive up the drug’s price.
Now, however, there are indications that Donald Trump may be backing away from taking on drug prices. A Los Angeles Times report notes that the healthcare agenda put out by the president-elect’s transition team makes no mention of drug pricing, despite the fact that Trump, as a candidate, made drug price concerns a central part of his health platform. More troubling, the report states that Trump has included many lobbyists and elected officials who have received hundreds of thousands of dollars from the pharmaceutical industry.
In a way, the writing may have been on the wall for Trump’s stance on drug pricing when he selected his running mate, Indiana Governor Mike Pence. Eli Lilly & Co. has historically been one of the biggest contributors to the past campaigns of Mr. Pence.
While the conventional wisdom is that no one really knows what Mr. Trump will do when he is actually sworn in as president, these indicators downgrade the possibility that he will spend political capital to tackle drug prices.
Biopharma stocks have been strong since Trump’s electoral college victory in the presidential contest. However, it’s good to remember that presidential tone and policy are just one factor that determine drug pricing. Insulin makers have been facing downward pricing pressure for their drugs, as insurance payors demand lower prices or fail to cover flagship insulin brands, and as basal insulin patents expire.
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