Specialty pharma stocks are dropping – again – on news that the Trump administration is preparing an executive order – again – targeting lower U.S. drug costs. Bloomberg reports that the order addressing the sensitive campaign issue could come within weeks and has been largely left out of Republican legislative efforts in Congress, until now.
As a result of the report, the Bloomberg Specialty-Generic Pharma index has dropped as much as 1.24%, its lowest in a month, with the drop led by the usual suspects: VRX -3%, MYL -2.7%, ENDP – 2.7%, MNK -1.2%.
Some more details from Bloomberg, which writes that top health and budget officials in the administration will meet Friday to discuss the issues, according to the people, who asked not to be identified because the session is private. Trump sought recommendations from the nation’s health agencies on reducing medication costs, Health and Human Services SecretaryTom Price told senators last week.
One policy being discussed for inclusion in the order is expressing support forvalue-based agreements, a drug industry-backed proposal in which pharmaceutical companies and health insurers develop arrangements to pay for products depending on how well they work, one of the people said. Price, Centers for Medicare and Medicaid Services Administrator Seema Verma, Food and Drug Administration Commissioner Scott Gottlieb and Treasury Secretary Steve Mnuchin are expected to attend the meeting Friday, which is being led by Office of Management and Budget Director Mick Mulvaney, according to the people.
The recommendations from the officials may be used to craft a first executive order on drug prices that could come out soon, according to the people, followed by a second, more extensive order later. While executive orders can’t change laws, Trump could use the efforts to direct agencies to explore regulatory changes and set direction.
The development is hardly new, with Trump having threatened on several occasions to force drugmakers to bid for government business as a way to reduce prices. He’s also talked about letting consumers import drugs from other countries with lower prices. Neither of those policies, which would likely require a change in law to be implemented in a meaningful way, are in drafts of the orders.