Any pharmaceutical executives that may have believed Donald J. Trump would give them a break from criticizing high drug prices, reconsidered that idea in the last few days.
“I’m going to bring down drug prices,” he told Time magazine in an interview published on Wednesday. “I don’t like what’s happened with drug prices.”
Biotech stocks immediately dropped about 3 percent on Wednesday. They recovered a little bit on Thursday and Friday; but Trump’s comments instilled a warning blow to an industry that rallied in the weeks following the election, assuming Donald Trump and a Republican Congress would be kind to the nation’s drug makers. All of a sudden, it appeared as if pharmaceutical companies may be joining Carrier, Ford and Boeing as Mr. Trumps targets.
However; unlike those other companies, many pharmaceutical companies have made public announcements in recent weeks to protect themselves from future attacks. A few have pledged to limit price hikes. A couple others offered plain-spoken critiques of drug pricing. Also, the industry’s top two lobbying groups have moved forward with large campaigns intended to win back the narrative.
“It’s very easy to villainize pharma, and Trump loves pointing out the bad guys,” said Alana Dovner, a research analyst at Beacon Policy Advisors. “And pharma knows that.”
Novo Nordisk; the Danish manufacturer of diabetes treatments such as insulin (whose prices rose sharply in recent years), announced on Monday that it would limit price increases in the American market to no more than 10 percent per year. They increased prices twice in 2015; once by 5.9 percent and another by 9.9 percent for a vial of Novolog, one of its insulin products.
Novo Nordisk was the second large pharmaceutical company; behind Allergan’s chief executive Brent Saunders, in recent months making such a pledge.
Mr. Saunders cautioned peers at a health care meeting in New York; saying Mr. Trump may be “a more vicious tweeter” toward the industry than Hillary Clinton. Wednesday, Mr. Saunders summoned the industry to take control of the story.
“If our industry can self-regulate on pricing, we can all focus on investing in innovative medicines and cures and move the pricing discussion to the back burner,” he said in a statement. “I think everyone, especially the patient, is better off if that happens.”
Mr. Saunders among others have purposely distanced themselves from companies such as Turing Pharmaceuticals and Valeant Pharmaceuticals International; two pharmaceutical companies who became the public face of predatory drug pricing. They were accused of hiking prices on old drugs they had recently acquired, rather than developing innovative new drugs.
Mylan; another drug maker, was is the hot seat this summer after increasing prices on its EpiPen (treatment for severe allergies). This prompted congressional hearings and led to a bunch of federal investigations, which are currently ongoing.
The makers of some new drugs have also come under harsh criticism, accused of charging outlandish prices — up to $300,000 a year. Those prices have set up a fierce battle from those who are being asked to pay the bill, including insurers and patients.
In response, the industry’s two major lobbying groups, the Pharmaceutical Research and Manufacturers of America and the Biotechnology Innovation Organization, have started major campaigns to rehabilitate their image, a tacit acknowledgment that they have been losing the public relations battle.
“We’re not telling our story very well,” said James C. Greenwood, the chief executive of the biotechnology group, which is often called Bio. “So we made a huge effort in the last year to try to be better at telling our story.”
Since his election, Mr. Trump has proved to be an unpredictable ally of big business, appointing a host of business-friendly people to his administration even as he has not hesitated to excoriate major companies, as he did with Carrier, Ford and Boeing — and threatened to go after others.
The stakes for the pharmaceutical industry were on full display at the recent health care meeting in New York, where emotions ran high and executives sharply debated who was to blame for the situation they find themselves in.
During one panel discussion at the Forbes Healthcare Summit in New York, Leonard Schleifer, chief executive of Regeneron Pharmaceuticals, bluntly blamed the industry in an exchange with his counterpart at Pfizer, Ian Read, saying it had relied on price increases to compensate for a lack of innovative new drugs. “It’s ridiculous,” Dr. Schleifer said. “I hate us also when I see all this stuff.”
In an interview Thursday, Dr. Schleifer said the industry needed to be more honest with the public. “I felt it was time that we acknowledge that the industry is doing some bad stuff, which is overshadowing all the good things we do,” he said. “And this attitude that we shouldn’t have to apologize for what we do is just wrong.”