President Donald Trump on Jan. 31 came face-to-face with some of the biggest players in the biopharmaceutical industry — the sector he accused earlier this month of "getting away with murder" — and told them point blank they needed to get their prices "way down."
"Pricing has been astronomical for our country," Trump said in front of news reporters just before meeting with the head of the Pharmaceutical Research and Manufacturers of America, Stephen Ubl, and the CEOs from Merck & Co. Inc., Novartis AG, Amgen Inc. and Eli Lilly & Co.; the chairman of Celgene Corp.; and an executive from Johnson & Johnson, who all serve on the Washington-based drug lobbying group's board.
The new U.S. president, however, appeared to give conflicting statements on whether he would follow through with his campaign promise to push Congress to allow the Medicare program to negotiate drug prices.
"I'll oppose anything that makes it harder for smaller, younger companies to take the risk of bringing their product to a vibrantly competitive market," Trump said. "That includes price-fixing by the biggest dog in the market, Medicare, which is what's happening. But we can increase competition and bidding wars, big time."
Later in the day, however, Trump's chief spokesman, Sean Spicer, said the president "understands the challenges, the bureaucracy, that's holding back some of the negotiating that's allowing these prescription drug prices to drop or get the best deal for the government."
Whether it's Medicare or Medicaid, you've got such purchasing power that's not being utilized to the full extent.
"Whether it's Medicare or Medicaid, who are such large buyers, or the VA ... you've got such purchasing power that's not being utilized to the full extent," Spicer told reporters, calling his boss a "top-notch negotiator."
The biopharmaceutical executives did not get into any "elaborate policy details" on the drug pricing matter with Trump, Lilly CEO David Ricks said during his firm's quarterly earnings, which he had moved to later in the day so he could attend the White House meeting.
But "we all understand the concern he's raising," Ricks said.
The Lilly chief said he left the meeting feeling confident the people who will be working closely with the industry on any drug pricing legislation "have a good grasp" of the facts.
Rep. Greg Walden, R-Ore., chairman of the House Energy and Commerce Committee, who attended the White House meeting, later said he was going to put drug pricing "high on our agenda."
"There are lots of ways to get at it," he told reporters.
At the more than hour-long White House meeting, Trump also said he expected drug manufacturers to make their products in the U.S., not elsewhere.
Trump said his administration's trade policy would put an end to what he called "freeloading" by foreign nations with price controls, which he said leaves Americans to pay the high prices that fund biopharmaceutical research and development.
"It's very unfair to this country," he said.
But changing the global drug pricing structure is unlikely, said Cowen & Co. analyst Rick Weissenstein, although he said some small victories on that front may be possible.
Trump also said he wants drugmakers that have fled the U.S. and reincorporated overseas with the aim of paying lower tax rates — a practice known as inversion — to return to America.
As an incentive to lure companies back to the U.S. and keep them here, the president vowed to lower corporate taxes.
"We're encouraged that he supports the need for continued biomedical innovation in the United States, including the need to make our tax code more competitive," Merck told S&P Global Market Intelligence in a statement.
"We can be a very positive part of the story of creating jobs in the United States if we get the tax reform," said Pfizer Inc. CEO Ian Read, who has attempted two inversion deals in recent years, although those agreements with AstraZeneca Plc and Allergan Plc ultimately failed.
Read spoke on his firm's scheduled earnings call and was not at the White House meeting.
PhRMA believes Trump's agenda on taxes, trade and regulations could create 350,000 American jobs over 10 years due to biopharma industry growth, Ubl said.
At the meeting, Amgen CEO Robert Bradway told the president the company planned to hire 1,600 skilled workers across the U.S. this year alone.
"This includes both workers who will bring new skills to Amgen, as well as those required to address attrition and other needs," Amgen told S&P Global in a statement.
Trump also pledged to cut FDA regulations by as much as 80% and streamline the agency's approval process to make it faster and less complicated for medical products to enter the market.
We're going to be changing a lot of the rules.
"We're going to be changing a lot of the rules," he said.
But those tasks may be "easier said than done," Cowen's Weissenstein said.
If Trump can remove some of the regulations and make it easier and faster to get medicines approved, "that will make the marketplace a lot more competitive, which will then in turn help bring down drug prices," Read said on Pfizer's earnings call.
Trump also said he plans to soon reveal his choice to lead the FDA, but gave no hints about who that person would be.
The "most politically palatable" candidate to fill the FDA commissioner's job, Weissenstein said, is Scott Gottlieb, who served as deputy commissioner for medical and scientific affairs at the agency from 2005-2007, in addition to other roles, including senior adviser for medical technology and director of medical policy development.
The most "disruptive" candidates that have been mentioned "will be difficult to confirm," Weissenstein said.
Trump on Jan. 12 met with technology venture capitalists Balaji Srinivasan, CEO and co-founder of the bitcoin firm 21.co, and Jim O'Neill, managing director Mithril Capital Management, both of whom the president's chief spokesman said were being considered for positions at the FDA, although he did not specifically say commissioner.
Joseph Gulfo, executive director of the Lewis Center for Healthcare Innovation and Technology at Fairleigh Dickinson University in Teaneck, N.J., was rumored to be up for the job, although his spokeswoman declined to say whether he had ever met with Trump, and the White House declined to comment.