Biotech and Pharma

Trump hasn't attacked drug prices, as he promised he would, during his first year in office

Key Points
  • President Donald Trump has repeatedly criticized the pharmaceutical industry.
  • One year into his presidency, Trump has not done much to lower prices.
  • Trump's FDA commissioner, Scott Gottlieb, has taken a number of steps to increase competition.
President Donald Trump attends a discussion on making changes to the prison system on Thursday January 11, 2018 in Washington, D.C.
Matt McClain | The Washington Post | Getty Images

Donald Trump raged against the pharmaceutical industry as a candidate. He accused drug companies of "getting away with murder" as president-elect. But he hasn't done too much to tackle prices as president yet.

Trump has occasionally criticized high drug prices, but he hasn't taken concrete actions to lower them. A wave of companies hiked prices at the turn of the new year, keeping the increases around 10 percent, a move Regeneron CEO Leonard Schleifer worries will prompt regulation, Schleifer told CNBC.

Wall Street doesn't appear to be afraid of government intervention, if stock prices are any indication.

"The administration has not lived up to the hype I think people expected around drug prices," said Dr. Walid Gellad of the Center for Pharmaceutical Policy and Prescribing at the University of Pittsburgh. "They've done a few things, but it hasn't lived up to the hype."

Trump sporadically saber rattles about drug companies hiking prices, but he hasn't pushed Congress to pass legislation that either would impose price controls or allow Medicare to negotiate prices with pharmaceutical makers.

As a candidate, Trump supported Medicare negotiating prices. However, much of his attention in the White House was focused on another health-care issue: trying to win repeal of the Affordable Care Act, as Obamacare is formally known.

Trump also lost his Health and Human Services secretary, Tom Price, after Politico revealed he was using government-owned planes for personal reasons. Trump sparked criticism for nominating Alex Azar, a former executive at pharmaceutical giant Eli Lilly, as Price's replacement.

Although Trump hasn't taken action to control drug prices, his Food and Drug Administration commissioner, Scott Gottlieb, has taken a number of steps to increase competition.

Gottlieb instructed the agency to publish a list of off-patent branded drugs without approved generics and implemented a policy to expedite the review of generic drug applications for areas without much competition. He's pledged to review a law that provides incentives to companies to develop treatments for rare diseases, or "orphan drugs," but has been applied widely.

David Mitchell, founder and president of the advocacy group Patients for Affordable Drugs, said Gottlieb is a bright spot in an administration that so far has not matched its rhetoric.

"Scott Gottlieb is doing the things he can within the scope of his authority, but Scott Gottlieb has no authority to lower prices," he said.

Trump's second year in office will include midterm elections. Some watchers predict campaign season will reignite his and other politicians' focus on drug prices. The majority of Americans think costs are unreasonable and pharmaceutical companies make too much profit, according to polls from the Kaiser Family Foundation.

That could make drug prices an easy target for politicians on both sides of the aisle.

"I am highly confident this is a subject that will be front and center in 2018 and will impact the sector," said Wells Fargo analyst David Maris. "Whether anything gets solved and done is a different question, but consumers care way too much about this. And right now, Wall Street is ignoring it. It will come up again in a big way."