In 2015 the top 20 pharmaceutical companies made $125 billion in profit between them (not sales, profit, as in what is left over for investors after all the marketing cost, executive salaries, R&D, and production costs were paid – in that order). Both Trump and Clinton campaigned against high drug prices. Both Trump and Clinton promised to allow the re-importation of drugs from Canada – essentially allowing US consumers to buy US-made drugs at Canadian prices. So where is Trump on this promise? I don’t know about you, but I haven’t heard a peep about since the election. And his cabinet is stocked with industry shills who opposed re-importation during the campaign. #fakePopulist
Let’s put this in prospective: top 20 pharma cos have let’s say average $75b market capitalization (that’s low balling) so $1.5T of equity returned $125B (~8%), very standard for companies of that size and maturity. They aren’t crying poverty, but it’s not high times either. More importantly, the import law adjustments would more likely result in corresponding changes in how pharma cos sell in Canada to compensate, than anything else.
There is a bit of circular reasoning in this point. Market capitalization is so high precisely in expectation of those kind of profits. Were absolute profits lower, market cap would shrink to match, and an ROI in the range of 5-10% would re-emerge. That is pretty much how the markets find the their valuations. Hence current stock prices are not a good justification for profits, since they follow, rather than lead. Also, the law of unintended consequences is something to watch out for; we could just end up making everything more expensive for Canadians!