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Trump's order to exit China thorny for drugmakers; president promotes J&J drug

If President Donald Trump ever carries out his order for U.S. companies to exit China, it could cripple the biopharmaceutical industry, which relies heavily on that nation for key ingredients for American drug products.

According to the U.S. Food and Drug Administration, about 80% of the active pharmaceutical ingredients used in the drugs Americans take comes from overseas — mostly from China.

SNL ImagePresident Donald Trump
Source: Associated Press

In addition, more than 13% of manufactured U.S. drugs and biologic medicines are imported from China, former Republican Sen. Jim Talent of Missouri noted during a July 31 hearing of the U.S.-China Economic and Security Review Commission.

In an Aug. 23 tweet, Trump "ordered" U.S. companies to "immediately start looking for an alternative to China" and insisted he had the authority under a 1977 law to impose such a demand.

But two days later, Trump said he had no current plans to declare an emergency under the International Emergency Economic Powers Act to force U.S. companies out of China.

"Actually, we're getting along very well with China right now," Trump said on Aug. 25 at the G-7 summit in Biarritz, France — two days after he called that nation's leader, President Xi Jinping, an "enemy."

His Aug. 23 morning tweet telling American companies to leave China sent stocks falling sharply, with the S&P 500 closing down 2.6%, while the Dow Jones Industrial Average slid 2.4% and the Nasdaq dropped 3%.

While Trump's tweet was "clearly trying to ratchet up the pressure" on China to accommodate the U.S. in trade negotiations, it also "implied that he thinks it would be either benign or maybe even helpful for the United States to decouple completely from the Chinese economy. That would be a disaster," said Joshua Bolten, president and CEO of the Business Roundtable, whose members include Johnson & Johnson, Bristol-Myers Squibb Co. and Pfizer Inc.

Not knowing from one day to the next what direction Trump will take with China on trade has made it difficult for U.S. businesses to plan their investments, Bolten said on CBS' Face the Nation on Aug. 25.

"If this spirals out of control, the risk is that everybody's going to slam on the brake and that would be a disaster, not just for the Chinese, but for the United States, as well," he said.

On Face the Nation and CNN's State of the Union, White House National Economic Council Director Larry Kudlow played down Trump's tweet.

But Bolten said Kudlow was "not reflecting the views of American business when he says this is all fine."

Trump promotes J&J antidepressant

Last week, Trump again called on the U.S. Department of Veterans Affairs to stock Johnson & Johnson's recently approved nasal-spray antidepressant Spravato, also known as esketamine, insisting it could be used to prevent suicides in former military soldiers — an indication not condoned by the FDA.

"I've instructed the top officials to go out and get as much of it as you can from Johnson & Johnson," Trump said during his Aug. 21 remarks at the AMVETS 75th National Convention in Louisville, Ky.

SNL ImagePresident Donald Trump and J&J CEO Alex Gorsky
Source: Associated Press

He made similar remarks to reporters ahead of his speech.

Spravato was approved by the FDA in March for treatment-resistant depression. The medicine carries a black-box warning alerting prescribers to closely monitor all antidepressant-treated patients for clinical worsening and emergence of suicidal thoughts and behaviors.

It was not the first time Trump publicly promoted Spravato as a treatment to prevent suicides in veterans, despite the lack of approval for that use.

In June, Trump told VA Secretary Robert Wilke to "corner the market" on Spravato, adding that he would personally help negotiate the drug's price with J&J.

The VA's coverage of Spravato is currently restricted to nonformulary use, meaning doctors must receive certain permission to prescribe it to veterans before the agency will pay for it.

The drug has been criticized for its high list price, which can run up to about $50,000 per year.

J&J offers the VA the lowest price for Spravato in the U.S., the company told S&P Global Market Intelligence in a statement.

A J&J spokesman said neither CEO Alex Gorsky nor anyone else at the company has ever discussed Spravato with Trump. He said Gorsky and J&J have also not negotiated directly with Trump on Spravato's price.

Gorsky has attended at least four meetings and events with Trump since he has been in the White House. At Trump's Aug. 7, 2018, dinner with business leaders at his Bedminster, N.J., golf club, Gorsky praised the president, despite criticizing remarks he had made a year earlier.