Lobbying groups warn that USA President Donald Trump's new pharmaceutical pricing proposal could result in losses of up to 1 trillion dollars for pharmaceutical companies over the next decade.
The Zhito Finance APP learned that lobbying groups warned that USA President Donald Trump's new Pharmaceutical pricing proposal could result in losses of up to 1 trillion dollars for pharmaceutical companies in the next decade. As a result, $SPDR S&P Biotech ETF (XBI.US)$ fell 6.63% overnight.
The White House proposed this plan last week as a way to help pay for Trump's tax cut plan. This proposal caught the Pharmaceutical Industry off guard and triggered intense lobbying activities.
According to reports, a dozen industry lobbyists and consultants stated that the Pharmaceutical Industry is no longer in a wait-and-see position, and several executives are preparing to go to Capitol Hill for a tour this week.
Specifically, the White House is asking House Republicans to tie drug prices in the Medical Assistance program to the prices paid in foreign countries, a move that will cost pharmaceutical companies billions of dollars in revenue. Trump had previously explored different versions of this proposal, but it may unexpectedly apply to low-income and disabled individuals.
Some lobbyists indicated that the lobbying group PhRMA held an emergency conference call with Board of Directors members on Sunday to discuss its opposition strategy.
During Trump's second presidential term, executives in the Pharmaceutical industry were mostly cautious. Previously, Trump had publicly considered imposing tariffs on the Pharmaceutical industry, appointed vaccine skeptic Robert F. Kennedy Jr. as the Secretary of Health and Human Services, and authorized the world's richest man, Elon Musk, to cut staff at the Pharmaceutical regulatory agency. The so-called 'international reference pricing' policy will test the Pharmaceutical industry's ability to influence Republicans on Capitol Hill and in the White House.
PhRMA spokesperson Alex Slaughter stated in a written statement: 'Any form of government pricing is detrimental to patients in the USA. Implementing foreign reference pricing in the Medicaid program does not save money for patients, and it could actually increase their medical costs.' In the USA Medicaid program, most patients pay a lower and fixed amount for their prescription drugs.
Some House Republicans, including Budget Chairman Brett Guthrie who oversees Medicaid Affairs, had previously opposed the 'international reference pricing' policy. Sources indicated on Tuesday that Guthrie's concerns about the policy have not changed.
Reports suggest that Guthrie plans to meet with other Republicans on the committee earlier on Wednesday to make a final decision regarding Medicaid reform and other proposals.
Joe Grogen, who served as the chairman of the White House Domestic Policy Council during Trump's first term, stated that given Trump's actions during his first term and campaign, it is not surprising that he insists on lowering drug prices and shifting drug manufacturing back to the USA.
Grogen stated: 'What confuses me is that some people in the industry actually think he is not serious. He has made it very clear.'
Editor/Lee
