Pharmaceutical companies are well used to adjusting to account for the occasional political turmoil – one Irish industry source said this week that managing risk was in their DNA – but what they certainly do not like is uncertainty.
That is the big challenge for the sector following the latest pronouncements from Donald Trump.
The pharma sector had been girding itself for tariffs: indeed, if what Cantillon hears is accurate, they seemed to be confident, if not comfortable, that they could live with a charge in the 20-25 per cent range.
Many big players had tried to blunt the impact of tariffs and get into the US president’s good books with the announcement of major investments in new or expanded operations in the United States.
But Trump’s announcement that he wanted drugmakers to lower prices of brand-name medicines by up to 80 per cent has thrown things into a spin. Investing further in markets where prices are being pushed down runs counter to the pharma playbook.
Swiss pharma giant Roche, the fifth largest company in the sector by sales, committed only last month to invest $50 billion (€45 billion) in the US.
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“Should the proposed EO [Executive Order] go into effect, Roche’s ability to fund the significant investments previously announced in the US will be in question,” the company said in a statement on Wednesday hours after the US president’s remarks.
That is the contradiction at the heart of Trump’s current populist play.
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Analysts and legal experts say a policy to force prices down – never mind getting those same drugmakers to push prices up in defiance of agreements in other countries – would be difficult to implement.
But perhaps that misses the point. Apart from deflection, Trump’s commitment is to showmanship and his vision of himself as the world’s great dealmaker.
Pharma executives and lobbyists in Washington DC and elsewhere will be trying to assess just what needs to be done to give Trump the appearance of a win he can claim as his without undermining their own businesses.
The alternative is a drawn-out legal battle that neither side will relish.
