Biotech and drugs stocks are soaring Tuesday after President Donald Trump, meeting with CEOs of the biotech and pharma industries, promised to "streamline the FDA" and cut regulations so that new products can be brought to the market faster and cheaper.
But Trump also wants drug prices lowered through more competitive bidding. He vowed to take on "price fixing by the biggest dog in the market, Medicare."
The industry-tracking exchange-traded funds, the iShares Nasdaq Biotechnology ETF (IBB) and the SPDR S&P Biotech ETF (XBI) , rose 2% and 2.5%, respectively, following Trump's remarks at the start of his meeting with drug company executives.
Here are some of Trump's comments from the meeting:
"We don't make the drugs in our country anymore. A lot of that has to do with regulation. A lot of that has to do with other countries taking advantage with their money and their money supply. And devaluation. Our country has been run so badly. We know nothing about devaluation..."
"You have to get your companies back here. We have to make products back. We're going to get rid of a tremendous number of regulations. I know you have some problems where you cannot even open up new plants. You can get approval to open the plants and then you can't get approval to make the drug. Other than that you're doing fantastic."
"We're going to be cutting regulations like nobody has ever seen before. And we're going to have tremendous protections for the people, perhaps even more protections for the people. But instead of being 9,000 pages, it can be 100 pages..."
"We have to lower the drug prices. Competition is a key to lower drug prices. We have competition but a lot of times the competition dissipates. I'll oppose anything that makes it harder for smaller, younger companies to take the risk of bringing their product to a vibrantly competitive market. That includes price fixing by the biggest dog in the market, Medicare, which is what's happening. We can increase competition and bidding big time. We have to get into that program, we have cases where you might go to a drug store to buy aspirin and the aspirin costs me less than what the United States pays for it. The United States is the biggest purchaser of drugs anywhere in the world by far."
"We're going to work on innovation, we're going to work on price, we can save tens of billions of dollars and you people are going to be great. What I want is we need to get lower prices. We have to get even better innovatio and I want you to move your companies back to the United States. And I want you to manufacture in the United States."
"We're going to streamline the FDA. We have a fantastic person that i think I will be naming very soon. We're going to streamline the FDA. You're going to get your products either approved or not approved but it's going to be a quick process. It's not going to take 15 years."
"I read where it sometimes takes $2.5 billion on average to come up with a new products. 15 years, $2.5 billion to come up with a new product where there is not even a safety problem. That's crazy."