As President Donald Trump was slated to sign executive orders aiming to lower drug prices on Friday afternoon, pharmaceutical companies’ shares were losing ground.
PRICING POLITICS
The orders targeting drug prices “may illustrate efforts by the Trump administration to shore up support for a key voter issue with President Trump and other Republicans losing momentum ahead of the election,” said Height Capital Markets analysts in a note Friday.
“The rebate rule will reportedly no longer be included in today’s EOs, but a favored-nation proposal is reportedly in the mix,” the analysts added, referring to a proposal intending to channel hidden discounts directly to patients.
“We believe the favored-nation proposal could go one of two ways: 1) a mandate that the federal government purchase drugs at internationally low prices, which would have little actual impact given that the government directly purchases so few drugs, mainly for veterans and the prison population; or 2) a mandate that HHS promulgate the International Pricing Index (IPI) model NPRM, which we believe would be a serious headwind to pharmaceutical manufacturers. However, finalizing the model before the November election will likely be a significant challenge for the administration.”
HHS stands for the Department of Health and Human Services, and NPRM stands for notice of proposed rulemaking.
Pharma stocks, as tracked by the Invesco Dynamic Pharmaceuticals ETF PJP, -2.01%, were recently trading 1.7% lower, while the broad S&P 500 index SPX, -0.69% fell just 0.5% Friday.
Trump over the years often has stated that drug companies are “getting away with murder” and prices are “out of control,” though this year he has been meeting with pharma execs as their companies work on a coronavirus vaccine.
From the archives:Drugmakers’ lobbying spending at 10-year high as Washington targets soaring prices
And read:Pelosi’s drug-pricing bill passes House, but pharma stocks are up as it’s unlikely to become law
MEDAL FOR RYUN, BARSTOOL SPORTS INTERVIEW
Trump on Friday morning awarded the Presidential Medal of Freedom to legendary runner and former Kansas Republican Rep. Jim Ryun.
The president has been speaking about the role of sports in the U.S. recovery, and a White House spokeswoman tweeted late Thursday that the he had sat down for an interview on that topic with Barstool Sports founder Dave Portnoy, who recently has gained a following as a day trader.
Trump on Friday was not slated to conduct a 5 p.m. Eastern Time coronavirus briefing after holding one for three days in a row. He announced at Thursday’s briefing that he was scrapping the Florida component of next month’s Republican National Convention as COVID-19 cases surge in that state.
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