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Analyst: Trump's 'Naming And Shaming' Campaign To Build Pharma Headline Risk

Analyst: Trump's 'Naming And Shaming' Campaign To Build Pharma Headline Risk

The Food and Drug Administration announced Monday it would publish correspondence with drug manufacturers accused of abusing agency standards to foil generic competitors.

Height Capital Markets considers the public censuring indicative of a broader federal strategy to pressure industry change.

“Biopharmaceutical investors should brace for a ‘naming and shaming’ campaign by Trump Administration officials in an effort to discourage manufacturers from raising prices and deterring generic competition,” Height's Andrea Harris wrote in a Tuesday note.

Bully Pulpit

Harris expects President Donald Trump not to enforce aggressive policy but to use “the power of the bully pulpit” to spotlight offending companies and pressure pricing changes — a view seemingly vindicated by Health and Human Services Secretary Alex Azar.

“I can imagine he is going to be very interested in the next company that takes a price increase not justified by inflation or change in clinical benefit,” Azar told reporters Monday.

He demonstrated the strategy by singling out Revlimid — a product of the otherwise unmentioned Celgene Corporation (NASDAQ: CELG) — and its 20-percent year-over-year increase.

Height expects the Trump Administration to leverage its updated Drug Pricing Dashboard as a platform to condemn targeted companies.

"We look forward to working with industry to build a better system,” Azar said in his speech. “But if industry isn’t willing to work with us to lower prices, President Trump and his administration will keep turning up the pressure — until the system finally puts American patients first."

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