Most Favored Nature Rx Pricing

Check this out. What you will see is an announcement by President Trump that he is “working on” a “favored nation clause” that would cap the price that the U.S. pays for a drug at parity with the lowest price paid by any other country. No great surprise that pharmaceutical stocks fell significantly at that news. 

But folks, it is not going to stop there. In comments made on a different occasion, Trump said that lots of people have been taking commercial advantage of the U.S. “. . . like China, pharmaceutical companies . . . ”

Bottom Line. Here’s a hint. Any time drug companies wind up being presented as being in the same league as China, you know our industry’s PR problem has just gone from bad to worse. And as the Democratic Presidential Debates clearly indicated, we are not going to do a lot better PR  if one of those 20 candidates gets general election traction either.  

In brief, there could be a significant profitability inflection point in our industry if this sentiment, and resulting “Executive Orders,” continue unabated. We’ve all heard these doomsday scenarios before in our careers. But, is this just another red herring, or might something of consequence actually happen here?

Stay tuned!

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