Big Pharma Mega-Deals Plunge to Five-Year Low Due to Slow Movement by Trump Administration

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Pharmaceutical Companies Unsure How to Act Due to Uneven Tone from the President

Big Pharma mega-deals, mergers, and acquisitions have fallen to a five-year low as the White House has been slow to implement its promised tax reforms, with President Donald Trump’s words on drug prices complicating matters.

Jobs are a big focus of this presidency, and cuts are often made after big mergers and takeovers in order to reduce redundancies. While some experts believe that the slowdown in big pharma mergers has to do with the president’s focus on job retention, others believe that his failure to implement a tax holiday for corporations to repatriate funds, as well as his statements on drug prices, are obstructing big deals in pharma.

Other experts believe that no matter how long these deals are delayed, they will eventually happen, and the jobs will be lost no matter what President Trump does.

With the total value of U.S. deals in the sector amounting to $13.0 billion, this is the lowest value of these large deals since 2012. Some of the negative effects of the slowdown could be less growth in the sector and less investment overall, but some positives include protecting jobs and keeping companies at a manageable level.


But that’s where the president’s words and promises will come back to hurt him. While Trump has been rather difficult to pin down on many different policy issues, one of the main tenets of his campaign was to lower the cost of doing business in the U.S. Many took this to mean that bigger deals would be on the way, especially in pharma.

Trump, however, followed these seemingly positive attitudes towards the sector with a tirade against the surging costs of drugs, and how that had to be controlled.

Trump’s lethargic administration has also been bogged down by scandal and a difficult fight in Congress to get its budget and healthcare bill passed. These developments have prevented the administration from moving forward with a lot of its promises, like the corporate tax holiday for companies to repatriate funds.

The bottom line is that several of Trump’s promises have gone unfulfilled, and may ultimately end up costing Americans jobs in the long run as big pharma companies do eventually look to merge together regardless of the political uncertainty, which would mean a bigger hit to pharma workers.

Big US pharma dealmaking plunges to five-year low,” Financial Times, June 12, 2017.


Categories: Job Cuts, News