Johnson & Johnson (NYSE: JNJ) has been in dire need of some good news, with all of the lawsuits the company has been dealing with lately. But pharma executives hardly expected to get any at the meeting with President Trump the other day.
He had been talking about lowering drug prices in this country for a very long time, and there was no indication that today would be any different.
Everyone seemed to come out of the meeting at least cautiously optimistic that they were all on mostly common ground. As a result, Johnson & Johnson finished the day in positive territory after taking an initial dip.
Trump asked for two concessions from the drug companies:
- That they lower prices on medications sold in the U.S.
- That drug companies start bringing their production back to the U.S. and employ more American workers.
In return, Trump agreed to help loosen regulations and lower taxes, to make up for the loss in profits.
The problem, though, is that fewer regulations and lower taxes might make up for one or the other of Trump’s requirements, but probably not both. But Trump made it clear that the United States did not want to continue subsidizing the lower drug costs of the rest of the world, anyway. So he suggested that drug companies start making everyone else pay their share.
One last incentive the president offered to the drug company leaders was a promise to streamline the process for bringing a drug to market. Trump said that he would soon be bringing new leadership to the FDA and they would no longer have to wait for years to get new drugs approved.
Steve Ubl, president of PhRMA called the meeting both positive and productive. Considering what they were all expecting going in, it sounds like it really couldn’t have gone much better.