(Bloomberg) — Top U.S. drugmakers are heading to the White House Tuesday for a meeting with President Donald Trump, after he made a surprise attack on the industry this month, accusing the companies of "getting away with murder" and threatening to force them to bid for government business to lower medicines prices.
The gathering comes after Trump's comments about the industry on Jan. 12 sent biotech and drug stocks plunging. In the meantime, drugmakers have turned up their lobbying efforts with Congress as a potentially friendlier force that might counter Trump.
They've been meeting with Republicans and Democratic members of Congress, including those in leadership, to make their case for more measured proposals than Trump's, said Ron Cohen, chairman of the board at the Biotechnology Innovation Organization, a Washington lobby group for drugmakers. "Bidding" is essentially akin to drug companies' greatest fear: handing Medicare the power to negotiate prices. They've also met with people in the Trump administration, Cohen, chief executive officer of Acorda Therapeutics Inc., said in a telephone interview.
The drug industry is one of Washington's most powerful, and each year spends hundreds of millions of dollars on lobbying, in addition to being one of the biggest donors to political campaigns, according to the Center for Responsive Politics. The lobby group Pharmaceutical Research and Manufacturers of America, or PhRMA, also launched an image makeover Jan. 23 that will feature advertising and public affairs events that focus on the value of its products.
Top CEOs
At the Tuesday meeting with be PhRMA CEO Stephen Ubl, Merck & Co. CEO Ken Frazier, Eli Lilly & Co.'s CEO Dave Ricks and potentially others, according to spokesmen for the companies and the lobby group.
Republicans generally have not backed proposals that require more government involvement and instead have aligned themselves with ideas that promote free-market principles. Even in the face of a Democratic president and a Congress controlled by Democrats in 2009 when lawmakers were debating Obamacare, pharmaceutical companies were able to dodge Medicare price negotiation, partly by agreeing to commit $80 billion to help fund the health law.
Trump shocked the industry at his Jan. 12 news conference, when he said that "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." He also said the industry was "getting away with murder." After his remarks, the Nasdaq Biotechnology Index and the Standard & Poor's 500 Pharmaceuticals, Biotechnology & Life Sciences Index both fell by the most in about three months.
Unclear support
It's not clear that Trump has the support of key Republicans for the harshest drug price policies, which have typically been opposed by conservatives. The new chairman of the largest bloc of House conservatives said last week that he has "concerns" over Trump's stated plans to bargain with pharmaceutical companies over Medicare drug prices.
"I would be cautious in affirming that is the best approach to take," said Republican Study Committee Chairman Mark Walker of North Carolina, in a meeting with a group of reporters. The RSC had about 170 members last session — and its leaders expect to announce their membership number for this session in early March.
