After a much-needed meeting between pharmaceutical representatives and Donald Trump this morning, biopharma stocks are rallying.
To summarize, Trump’s comments after the meeting (a 10-minute clip is available here) focused on streamlining the regulatory process and reducing the burden on drugmakers. While the discussion of high drug prices wasn’t entirely absent, investors are putting some faith in the de-regulation talking points.
The comments should help to alleviate the overhang on drug stocks right now, but it’s not a cure for the malaise entirely. The bigger issue remains whether Trump will put in place legislation to curb drug prices, namely, by giving Medicare greater ability to negotiate prices. Despite a focus today on streamlining the approval process, Trump said repeatedly in the post-meeting public session that drug prices are too high, and he’d be working on that. We should know in the next month or two what Congress’ and Trump’s repeal/replace plans look like, which will help, and the appointment of his FDA commissioner should offer some perspective on future drug regulation as well.