President-elect Donald Trump lashed out at overspending on drugs and fighter jets during his press conference on Wednesday, giving progressives something to hope for but sending stocks in related companies diving.
First, he took aim at the drug industry, complaining that it is making too many of its products overseas and that the government does not negotiate with the industry for prices for the Medicare program.
“We have to get our drug industry coming back. Our drug industry has been disastrous, they’ve been leaving left and right,” he said. “The other thing we have to do is create new bidding procedures for the drug industry because they’re getting away with murder. Pharma, Pharma has a lot of lobbyists — a lot of lobbyists — a lot of power, and there’s very little bidding on drugs. We’re the largest buyer of drugs in the world and yet we don’t bid properly and we’re going to start bidding and we’re going to save billions of dollars over time.”
U.S. President-elect Donald Trump takes questions from reporters during a news conference at Trump Tower in New York on Wednesday, Jan. 11, 2017.
Photo: John Taggart/Bloomberg/Getty Images
Drug price negotiation has long been a goal of progressive health policy advocates, and was something that both Trump and Clinton campaigned on during the presidential election.
Medicare is currently prohibited by law from negotiating drug prices — unlike other parts of the government, such as the VA. It is estimated the government could save up to $16 billion annually if it simply was allowed to negotiate with companies for the prices. The president-elect can’t do this unilaterally, however — he would have overturn a law passed by Congress, and thus would need the backing of lawmakers before making this change.
The NASDAQ Biotechnology Index, which includes drugmakers, fell after the comments:
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Trump also took aim at the F-35, a fighter jet whose development and support program has cost over $1 trillion and has been plagued by delays.
“I’m very much involved with the generals and admirals on the airplane, the F-35 you’ve been reading about it. And it’s way, way behind schedule and many, many billions of dollars behind budget. I don’t like that,” he said. “And the admirals have been fantastic. The generals have been fantastic. I’ve really gotten to know ’em well. And were going to do some big things on the F-35 program and perhaps the F-18 program. And we’re going to get those costs way down, and we’re gonna get the plane to be even better and we’re going to have to competition. And it’s going to be a beautiful thing.”
The stock price of Lockheed Martin, which produces the plane, did not react favorably:
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Top photo: Specialist Mark Fitzgerald, left, works with traders at his post on the floor of the New York Stock Exchange on Jan. 10, 2017.
