President Trump's Pharma Comments 'Incrementally Negative' - BMO Capital

BMO Capital analyst Alex Arfaei views President Trump's comments as incrementally negative for the Pharmaceuticals sector.

He weighed in: "The President clearly remains focused on lowering drug pricing, and seems particularly concerned about Medicare and Medicaid. He would have more political support for lowering drug prices (e.g. requiring Medicaid-level rebates for Medicare Part-D dual eligibles) as opposed tax reform, which would be needed to increase U.S. manufacturing. Overall, given the President's apparent priorities, we believe he will have more political support to implement drug price reductions, as opposed to proposals that would benefit Biopharma (e.g. tax reform)."

Arfaei views the President's comments as incrementally negative for branded Biopharma companies and he clearly remains focused on lowering drug pricing. He said increased U.S. manufacturing is unlikely without significant tax reform, which remains uncertain.

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