Finance

Trump Board Resignations Stoke Fears of Industry Backlash

Finance

18:00, August 18 2017

image

As Merck and J&J CEOs step down from Trump’s manufacturing council, experts fear he will reignite his war on drug pricing, Henry Kerali writes

When a protest in Charlottesville, VA, descended into chaos last weekend as violence erupted between white nationalists and counterprotesters, President Donald J. Trump was widely ridiculed for his responses in the aftermath.

At first, he failed to explicitly denounce the actions of far-right extremists and neo-Nazis, before declaring “racism is evil,” and that “those who cause violence in its name are criminals and thugs, including the K.K.K., neo-Nazis, white supremacists and other hate groups that are repugnant to everything we hold dear as Americans.”

However on Aug. 15, Trump appeared to row back on his comments, reverting to his original stance that both sides of the protests were just as culpable as each other for the violence. That, predictably, sparked even further controversy.

His “tepid” response to the protests, which left one person dead, precipitated mass resignations on the American Manufacturing Council – an advisory board involving America’s leading CEOs. First it was Merck boss, Ken Frazier, who led the way by stepping down as a matter of basic human principle. He said:

“America’s leaders must honor our fundamental values by clearly rejecting expressions of hatred, bigotry, and group supremacy, which run counter to the American ideal that all people are created equal.

 

“As CEO of Merck and as a matter of personal conscience, I feel a responsibility to take a stand against intolerance and extremism.”

This in turn prompted a sharp rebuke from President Trump as in time-honored fashion he took to Twitter, criticizing Frazier for his move.

After Frazier’s resignation, the heads of Intel and Under Armour shortly followed before J&J CEO, Alex Gorsky stepped down as well. As a result, Trump made the move to disband the manufacturing council altogether.

What was probably seen by most as an obvious move to mask further embarrassment, ending the advisory board will have been a significant blow for Trump. In the lead-up to the 2016 election, a core part of Trump’s platform was to bring jobs back to the U.S.; the manufacturing council was seen as a key step in making that pledge come to fruition.

With the board now a thing of the past, experts fear there could be a backlash toward the pharma and biotech industries in the wake of Frazier and Gorsky’s resignations. If Trump’s initial tweet (see above) is anything to go by, it appears as though the topic of drug pricing might be rearing its ugly head again.

On the campaign trail, Trump waged war on the industry, highlighting exorbitant drug prices and vowing to tackle them once in office. At the time, the industry feared the worst. However, since becoming president, Trump has toned down the rhetoric, but Adam Feuerstein of STAT recently opined that it remains to be seen what he’ll do next:

“[Trump] could encourage lawmakers on both sides of the aisle who are trying to move various pieces of drug-pricing legislation through Congress.

 

“Drug and biotech stocks did not react to Monday’s Trump-Frazier brouhaha, which suggests health care investors have tuned out Trump and aren’t concerned about him retaliating against the industry.

 

“Frazier’s decision to quit his manufacturing advisory council has earned him widespread praise, which could cause Trump more headaches if he did decide to exact more punishment from the industry.”

So when it comes to drug pricing, it could be a case of Trump talking the talk without walking the walk. But as is always the case with the president, it’s a brave person who predicts his next move.

 

PHOTO CREDIT: Gage Skidmore

Comments

Post a comment

Comments may be moderated for spam, obscenities or defamation.