It has been a rocky start for the Trump administration, whose controversial decisions on immigration and refugees have already led to worldwide protests and clashes with leadership from both parties. Nevertheless, President Trump continues to double down on his campaign promises, and his latest statements regarding drug prices and regulation have sent biotech stocks higher on Tuesday.
Shares of the iShares NASDAQ Biotechnology ETF IBB gained as much as 1.8% Tuesday morning, shortly after the president spoke with several industry leaders. Shares of the SPDR S&P Biotech ETF XBI and the Direxion Daily S&P Biotech Bull 3X ETF LABU were also up big.
The CEOs of Novartis AG NVS, Merck & Co Inc. MRK, Johnson & Johnson JNJ, Celgene Corp. CELG, Eli Lilly & Co. LLY, and Amgen Inc. AMGN met with the POTUS, who earlier this month said that the pharmaceutical industry was “getting away with murder,” at the White House this morning.
Today, President Trump took a slightly more welcoming stance, telling the CEOs that they have done a “very great job over the years” before arguing that now was the right time to lower prices. While the president’s push to get drug prices down may seem troubling for biotech investors, these concerns seem to be offset by his pledge to reduce regulations and streamline the approval process.
Indeed, investors are reacting to Trump’s latest promise to rollback a “tremendous number of regulations.” President Trump also hinted at the mentality of his pick to lead the Food and Drug Administration: “We’re going to streamline FDA; we have a fantastic person.”
Although the industry was spooked by Trump’s earlier comments on drug prices, executives appear to be encouraged by his regulatory goals and other plans to help businesses.
“Some of the policies you’ve come out and suggested I think can help us do more—tax, regulations,” said Eli Lilly President Dave Ricks.
Also on the docket for today’s meeting was the concept of “global freeloading,” a phrase Trump used to describe the idea that international pharmaceutical markets benefit from U.S. companies taking the brunt of the research and development costs. Of course, the entire medical field is also in a state of flux with Trump and the GOP expected to repeal the Affordable Care Act.
With a repeal of Obamacare slated to leave millions without health insurance, a replacement plan may be necessary given Trump’s recent public relations nightmares. The controversial president is not shying away from even his most polarizing campaign pledges, and that might explain Gallup’s recent poll showing him hit majority disapproval in record timing.
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Eli Lilly and Company (LLY): Free Stock Analysis Report
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