Investors betting that Donald Trump is going to lay off the drug industry might be in for a surprise, according to the CEO of Botox maker Allergan.
Drug stocks have were among the biggest gainers in the wake of Trump’s election last month.
Investors had been skittish about what a potential Hillary Clinton presidency would mean for regulation of drug development and pricing.
President-elect Trump on the other hand, has not been as clear about his stance on drug pricing.
But drug pricing is a populist issue, Brent Saunders said said the Forbes Healthcare Summit on Thursday, and populism was central to Trump’s campaign.
“I worry today that pharma has a false sense of relief or security,” he said.
It wouldn’t be completely surprising to see Trump tweeting opposition to the next EpiPen-like price increase. Over the course of her campaign, Clinton often sent drugmakers’ stocks falling with her comments.
In September, Allergan pledged to put limits on the size and frequency of drug price hikes in a social contract. For example, the company will only increase drug prices once a year, Saunders wrote in a blog post at the time. The hikes will be in only single-digit per cent amounts — you won’t see any 100% jumps — and won’t be on drugs that are about to lose patent protection.
On Thursday, Saunders extended that social contract to patient assistance programs for its drugs, covering the cost of those drugs for people who fall under 400% of the poverty level.
Even so, this doesn’t cover other aspects of the healthcare system that are contributing to high costs.
“I don’t believe what Allergan’s doing is the solution. I think it’s a meaningful first step,” Saunders said.