Pharma Stocks Soar Amid Medicaid Cuts and Trump’s Price Pressure — Here’s Why - video Dailymotion

Cheddar News

Amanda Chu of POLITICO reveals how lawmakers are betting millions on pharma stocks even as Trump threatens tariffs and demands steep drug price cuts. Watch!

Transcript

00:00Despite President Donald Trump's aggressive stance on the overall pharmaceutical industry,

00:04which includes the threat of tariffs and demands for price cuts up to 80%,

00:08lawmakers are still betting millions on drug company stocks.

00:12Here to talk much more about it is healthcare reporter at Politico, Amanda Chu.

00:16Amanda, really grateful for your time and you've done excellent work kind of uncovering the story

00:20and I'm hoping you can dive into it a bit for our viewers.

00:23Why are U.S. lawmakers investing so heavily in pharma stocks?

00:28Despite all of the calls for industry reform and what are those big names that they're gravitating towards?

00:34Yeah, so at Politico, we analyzed the financial disclosures of members of the House and Senate

00:40and we found that together they were investing up to $2.9 million in pharmaceutical stocks

00:46and this is in the largest U.S. pharmaceutical companies on the Fortune 500.

00:50So this is your Eli Lilly's, your Johnson & Johnson's, your Pfizer's, your Merck's, etc.

00:56and that Republicans outpace Democrats in purchases of pharma stocks.

01:02And so, like you said, this is really interesting because it's coming at a time

01:05when the Trump administration is really trying to aggressively overhaul the country's policies

01:10around vaccines and target pharma's bottom line.

01:13You know, we don't know why they're investing in pharma stocks in particular,

01:18but we do know that, you know, this is coming at a time of a lot of economic uncertainty

01:23around, you know, where the stock market is going to go.

01:26And traditionally, pharmaceutical stocks are seen as a defensive option.

01:31So it's because, you know, people need their medications

01:34and pharma companies enjoy patent protections and market exclusivity.

01:41Investing in pharma is a good option to do when you're worried about where the economy is going to go.

01:47Is there a notable uptick for this current Congress

01:50or have a lot of these trades existed going back a few years?

01:53So, this has routinely happened in the past.

01:59Lawmakers have invested in pharmaceutical stocks, like, you know, going before this administration.

02:04What makes it really interesting this time around, though, is, you know,

02:08just the aggressive effort the Trump administration has made to really target pharma

02:12in just the first six months of his second term.

02:16You know, just in May, he vowed to drastically reduce the cost of prescription drugs

02:21by as much as 80 percent.

02:24And this is something that, you know, is in direct conflict

02:26with the pharmaceutical industry's portfolio business practices.

02:31And we also saw that, you know, he's threatened tariffs on the industry.

02:35So, what makes it new this time around is that you have Congress

02:39with the financial stake in an industry that is, you know,

02:42being heavily targeted by the White House.

02:47Do we have a sense on particular lawmakers who might be a little bit over

02:51or exposed than others?

02:54Yeah.

02:54So, just starting with the Republican Party, Marjorie Taylor Greene led her party

03:01in terms of pharmaceutical stock purchases.

03:04She made around a dozen purchases this year.

03:06And she's, you know, a very vocal skeptic of COVID vaccines.

03:09She's promoted the idea that vaccines cause autism,

03:13which is something that has been debunked repeatedly.

03:17Among Democrats, you have Ro Khanna, the representative from California.

03:23He, like, has heavily purchased and sold pharmaceutical stocks

03:28in the trust of his wife and his children.

03:33And this is something that's really interesting because, you know,

03:36he's been a very loud proponent of targeting big pharma in Congress

03:41and lowering drug prices.

03:42When the Trump administration signed the executive order in May,

03:45he and Bernie Sanders actually, you know, supported codifying that provision into law.

03:50So, like, in a time of a lot of divide in Congress, you know,

03:54this is something that has a lot of bipartisan support.

03:56And, yeah, and then some other members, we have Jill Cisneros, another Democrat in the House,

04:06who is also, like, frequently buying and selling pharmaceutical shares.

04:11You know, whenever lawmakers on Capitol Hill get asked about their portfolio holdings

04:16and maybe the curious timing of some of the trades that they've made,

04:22especially if they sit on key committees where perhaps they have information before the rest of us do,

04:27the defense tends to be, well, I'm either in a trust or I have an outside advisor,

04:32and that advisor is the one doing the trades.

04:34Is that along the lines of the defense that you've heard from lawmakers in your news gathering

04:40for this story with a specific focus on pharma names?

04:44Yes.

04:44So that's sort of the line that every representative goes to.

04:48They say that, you know, these stocks are managed by an outside financial advisor

04:53and, you know, I don't have any control of what I buy and sell.

04:57We didn't include this in the article, but there actually was one instance

05:00where, you know, a senator's spouse purchased a bunch of stock in a pharma company,

05:07and then they actually sold it a month later when they discovered that, you know,

05:10their advisor purchased this for them.

05:12And so, you know, to what extent is that, you know,

05:16excuse for having a financial stake in an industry that, you know,

05:19you're actually promoting policies against, that's not for me to say,

05:24but, you know, this is something that members of Congress,

05:28this is a reason that they give for their exposure.

05:31What most surprises you or what most surprised you

05:34in the process of news gathering for this story?

05:36It's really fascinating.

05:37I mean, I think the one thing that surprised me the most was that, you know,

05:43we have Republican members of Congress who are outpacing Democrats

05:46in purchases of pharma stock shares.

05:49I mean, that is just really interesting because the Trump administration

05:54has made such an aggressive attempt to, you know, target big pharma.

05:58Another thing that, you know, kind of surprised me is that May was a frequent month

06:06for purchases of pharmaceutical stocks.

06:09And like I said, you know, this points to the fact that, you know,

06:11following the April 2nd Liberation Day tariffs in the Trump administration,

06:15there was a lot of concerns over the direction of the U.S. economy.

06:20And so it suggests that at least among members of Congress,

06:23the pharmaceutical industry is still seen as sort of this defensive option

06:27in times of economic uncertainty.

06:30And that is, you know, a long-held assumption about pharma stocks

06:34that is actually coming into question now that, you know,

06:37the Trump administration is just threatening all of these tariffs.

06:41And so it raises the question of, you know,

06:42is this industry still insulated like it was before?

06:48And finally, what does the role of the big pharma lobbying effort

06:51look like on Capitol Hill?

06:53Lobbying is a very old game on the Hill and there on K Street in Washington.

06:59I'm wondering what that looks like with regards to potential influence

07:02on lawmakers' approach to the big pharma names.

07:05What should people know about what the lobbying efforts look like?

07:08Yeah, so pharma has always had a close relationship with Congress,

07:12and this year is no exception.

07:15In the first quarter of this year,

07:17we saw that the pharma industry has spent a record amount to lobby Congress.

07:24I think it was around $13 million,

07:25and it doesn't seem like the second quarter is going to be any different.

07:29Just in this month alone in June,

07:31we've tracked at least half a dozen new lobbying registrations

07:36from pharma companies on Congress.

07:37This week alone, we had Novartis register former Senator Burr as a lobbyist,

07:46and, you know, he was a champion of FDA reform when he was in Congress.

07:50He was a top Republican on the Senate Health Committee.

07:53And so, you know, a lot of questions being raised here around conflict of interest

08:00and, you know, to what extent Congress will go to target pharma's practices.

08:06It's a fascinating bit of reporting.

08:08Excellent job on your news gathering, Amanda,

08:10and really grateful that you could join us here today for an interview

08:13to help us understand the story a little bit better.

08:16Amanda Chu, healthcare reporter at Politico.

08:18Amanda, thanks a lot.

08:19Yeah, thanks very much.

Pharma Stocks Soar Amid Medicaid Cuts and Trump’s Price Pressure — Here’s Why

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