President Donald Trump has called on pharmaceutical companies to lower huge drug prices.
During a White House meeting with senior pharmaceutical executives President Trump told the companies to manufacture more of their drugs in the US.
However, the president also vowed to help the companies by speeding the approval of new medicines and by cutting taxes.
Donald Trump’s pledges helped to send shares in many of the biggest US drugmakers higher on January 31.
Pharmaceutical companies have faced intense criticism from US politicians – including Donald Trump – as well as insurance companies and patients’ groups over the high cost of new medicines and price hikes in some older generic drugs.
Among those attending the meeting were executives from Merck, Johnson & Johnson, Novartis, Amgen and the head of the Pharmaceutical Research and Manufacturers of America (PhRMA) lobbying group.
Donald Trump told them in the meeting: “US drug companies have produced extraordinary results for our country but the pricing has been astronomical for our country, we have to do better.
“We have to get even better innovation, and I want you to move your companies back to the United States.”
To help the drugmakers, Donald Trump said his administration was “going to be lowering taxes big league”.
“We’re going to be getting rid of regulations that are unnecessary – big league,” he added.
Donald Trump’s promise to speed up approvals by the FDA for new medicines sparked strong gains in pharmaceutical shares.
Shares in Merck and Amgen rose by about 1% while Novartis was up more than 2% on Wall Street.
The NASDAQ Biotech Index gained nearly 3% after the meeting and the S&P 500 health care index rose 1.4%.
Investors had sold off shares in drugmakers in recent weeks following heavy criticism from Donald Trump – supported by Democratic Senator Bernie Sanders – over drug pricing.
However, senior pharmaceutical executives welcomed Donald Trump’s proposals on January 31 to cut taxes and loosen regulations.