Biotech and Pharma

Trump attacks Merck CEO for stepping down from manufacturing council in protest

Key Points
  • Merck CEO Kenneth Frazier resigns from the president's American Manufacturing Council in protest of Trump's response to white supremacist violence in Charlottesville, Virginia.
  • Trump immediately responds by tweeting that Frazier will now have more time to "LOWER RIPOFF DRUG PRICES!"
  • On Monday Trump held a press conference where he strengthened his comments, saying "Racism is evil."
Merck's CEO quit the president's manufacturing council

Merck CEO Kenneth Frazier resigned Monday from the president's American Manufacturing Council in protest of President Donald Trump's response to white supremacist violence in Charlottesville, Virginia, and Trump immediately blasted the drug executive on Twitter.

"As CEO of Merck and as a matter of personal conscience, I feel a responsibility to take a stand against intolerance and extremism," Frazier, the only African American CEO of a major pharmaceutical company, wrote in a tweet.

Merck CEO Tweet

Merck declined to comment further.

Shortly afterward, Trump responded by saying that in light of the resignation, Frazier will have more time to "LOWER RIPOFF DRUG PRICES!"

Trump Tweet

Later Monday, the president doubled down on his criticism of Merck. He called the pharmaceutical company " a leader in higher & higher drug prices while at the same time taking jobs out of the U.S."

@realDonaldTrump: .@Merck Pharma is a leader in higher & higher drug prices while at the same time taking jobs out of the U.S. Bring jobs back & LOWER PRICES!

Merck was one of the companies that partnered with the White House in its initiative to manufacture pharmaceutical glass packaging in the United States. When it was announced last month, Trump said the partnership between Merck, Pfizer and Corning would "create thousands of American manufacturing jobs."

A rally by hundreds of white nationalists in Virginia took a deadly turn on Saturday when a car plowed into a group of counter-protesters and killed at least one person. A white supremacist has been charged.

At a news conference on Sunday, Trump denounced what he called an "egregious display of hatred and bigotry" displayed by antagonists "on many sides." That drew an immediate backlash from people who felt Trump had not taken a strong enough stance against bigotry and extremism, lumping the counter-protesters in with the white supremacist groups.

On Monday, as the pressure against him escalated, Trump held a press conference where he strengthened his comments regarding the incident.

"Racism is evil," Trump said. "And those who cause violence in its name are criminals and thugs, including the KKK, neo-Nazis, white supremacists and other hate groups that are repugnant to everything we hold dear as Americans."

Merck's CEO Ken Frazier resigning from White House council

Others in the business community made statements supporting Frazier's stance Monday.

"I support Ken Frazier's decision," Meg Whitman, CEO of Hewlett Packard Enterprise, said in a tweet. "I'm thankful we have business leaders such as Ken to remind America of its better angels."

Roy Vagelos, former chairman and CEO of Merck and current chairman of Regeneron, also praised Frazier.

"I have known Ken for 25 years since I first recruited him to Merck," he said. "He is always smart, always ethical and repeatedly makes the right decisions. I applaud his decision to step down from the Council this morning. Ken is driven by a strong sense of morality in everything he does and he continues to make me proud."

Frazier isn't the first CEO to step down from a presidential advisory council to protest Trump's actions. Former Uber CEO Travis Kalanick left in February over the Trump administration's immigration policies.

Tesla CEO Elon Musk and Walt Disney CEO Robert Iger later departed the President's Strategic and Policy Forum in June, after Trump said he would withdraw from the Paris climate accord. Musk also left the manufacturing council.

In addition, several executives are no longer part of the council since they are no longer CEOs. They include: Mark Fields, of Ford; Klaus Kleinfeld, of Arconic; and Mario Longhi, of U.S. Steel.

Jeff Immelt, who recently stepped down as CEO of General Electric, plans to stay on Trump's council while he is GE's chairman. Immelt plans to retire at the end of this year.

"GE has no tolerance for hate, bigotry or racism, and we strongly condemn the violent extremism in Charlottesville over the weekend," the company said in a statement. "GE is a proudly inclusive company with employees who represent all religions, nationalities, sexual orientations and races."

Dow CEO Andrew Liveris did not say if he would stay on or leave the council, but condemned the events in Virginia.

"In Dow there is no room for hatred, racism, or bigotry," Liveris said. "Dow will continue to work to strengthen the social and economic fabric of the communities where it operates — including supporting policies that help create employment opportunities in manufacturing and rebuild the American workforce."

After the president's statement Monday afternoon, a Merck spokesperson said that Trump's more recent comments do not change Frazier's decision.

During Trump's brief remarks, he did not make any reference to Frazier's departure from the council or what he tweeted about drug prices Monday morning.

Earlier this summer, Trump talked about taking presidential action on drug pricing to address the rising costs of prescription drugs in recent years.

Jim Cramer on tweet attacking Merck CEO: Ken Frazier deserves better, Trump should apologize

Drugmakers are "getting away with murder," Trump said during a January news conference.

CNBC is reaching to other executives on the council to see if they have a response.

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