Trump’s Murder by Pharma Comment Should Be Taken Seriously

But the real problem isn’t drug prices.

by Patrick Cox
January 17, 2017

Last week, Donald Trump complained about drug prices in a press conference. Drug companies, he said, are “getting away with murder.” During that presser, pharma and biotech stocks lost over $20 billion in value. Investors should have learned an important lesson. They probably didn’t.

Trump’s targeting of drug sellers was not a fluke. Hillary Clinton’s “price gouging” tweet last September had a similar impact on markets. For those who understand the big picture, these two events offer clues about the future of the drug business.

The real problem isn’t drug prices

The big picture is relatively simple. Healthcare costs will continue to rise even if drug prices go down. At most, medicines account for about 15% of the national medical bill. They’re not the reason that costs are rising, but they are easier to attack than hospitals and doctors.

Here’s the real problem: America is broke. Worse than broke, actually. This is because of healthcare costs. These costs are…