Trump introduces marginal changes to address drug pricing issue: pharma sector breathes sigh of relief

The US President Trump, after many previous announcements, has provided some details about his strategy to address the drug pricing issue in the US. Data from IQVIA show that prices of the main drugs increased by 120% in the US in the 2012-2017 period–with some exceptions, such as Daraprim, which increased from $13 to $750 per tablet. The US market now accounts for approximately 30% of global  pharma sales, despite the US population accounting for as little as 4.5% of the world population. The most significant measure by Trump is that Medicare is now entitled to directly negotiate with drugmakers, however no dramatic changes have been introduced, thus the Nasdaq Biotechnology Index has risen 2.7%. US drugmakers, indeed, have breathed a sigh of relief, since they expected far more drastic measures. Trump’s approach to foreign groups will be different, in that he objects they benefit from the US market in terms of prices and innovation, thus he intends to set a limit on the profits they generate at the expense of US companies.

(Sources: WSJ, FT, Economist)