The New Yorker:

Wall Street is celebrating the White House’s deal with Pfizer on drug prices. Patients shouldn’t be.

By John Cassidy

It’s hard to find things that Donald Trump and Bernie Sanders agree on, but one point of consensus is that pharmaceutical companies have long been ripping off Americans by charging extortionate prices for prescription medications. “Americans are being screwed, and it’s no good. They’re not going to put up with it,” Trump said in February, at a White House event. In May, he issued an executive order declaring that the Administration would impose lower prices by fiat if drugmakers didn’t align their U.S. prices with what they charge in other countries. “I agree with President Trump,” Sanders commented in a statement. “It is an outrage that the American people pay, by far, the highest prices in the world for prescription drugs.”

In addition to threatening to introduce price controls, the Trump Administration was preparing the way for tariffs on drugs and their ingredients, many of which come from abroad. Wall Street paid attention to these threats. Between Trump’s election last November and the beginning of April, a period in which the stock market as a whole rose sharply, drug stocks fell by about twenty per cent. That was then. Last week, the President, standing alongside the C.E.O. of Pfizer, Albert Bourla, announced plans for a government-run website, TrumpRx, on which Pfizer would list some of its drugs at prices discounted up to eighty-five per cent. A White House fact sheet said the Administration and Pfizer, the world’s fourth-largest pharmaceutical company by revenue, had reached an agreement to “bring American drug prices in line with the lowest paid by other developed nations (known as the most-favored-nation, or MFN, price).” Wasn’t this more bad news for drugmakers? Investors didn’t think so. In two days, Pfizer’s shares jumped up by fourteen per cent. The stocks of other pharmaceutical companies also rose strongly based on predictions that they would strike similar deals. By the end of the week, the S. & P. Pharmaceuticals Select Industry Index had surpassed its November high.

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