Trump issues drug pricing executive order, decision pending on TikTok-Oracle deal
Catch up on the top industries and stocks that were impacted, or were predicted to be impacted, by the comments, actions and policies of President Donald Trump and his administration with this weekly recap compiled by The Fly:
1. DRUG PRICING: President Trump has issued an "Executive Order on Lowering Drug Prices by Putting America First," which stated in part "When the Federal Government purchases a drug covered by Medicare - the cost of which is shared by American seniors who take the drug and American taxpayers - it should insist on, at a minimum, the lowest price at which the manufacturer sells that drug to any other developed nation."
The order also stated: "It is the policy of the United States that the Medicare program should not pay more for costly Part B or Part D prescription drugs or biological products than the most-favored-nation price." Publicly traded large-cap drugmakers include AstraZeneca (AZN), Bristol-Myers (BMY), Eli Lilly (LLY), GlaxoSmithKline (GSK), Johnson & Johnson (JNJ), Merck (MRK), Novartis (NVS), Pfizer (PFE), Roche (RHHBY) and Sanofi (SNY).
2. TIKTOK-ORACLE DEAL: On Thursday, The New York Times' David McCabe, Erin Griffith, Ana Swanson and Mike Isaac reported that ByteDance had accepted the Trump administration's changes to a deal designed to mitigate the White House's concerns that the popular TikTok app poses a national security threat. The Treasury Department, which leads a group reviewing the deal for national security purposes, provided TikTok's owner with revisions to its proposal on Wednesday, a person familiar with the matter said.
Meanwhile, TikTok is also hunting for a permanent chief executive to replace Kevin Mayer, who resigned in late August, citing the changing political pressures of the role, the authors note. Among those whom TikTok has talked to about the job is Kevin Systrom, a founder and former CEO of Facebook's (FB) Instagram.
Oracle (ORCL) will own roughly 20% of TikTok and Walmart (WMT) is expected to partner with the company on the partnership, according to a report by CNBC's David Faber, citing sources. President Trump is expected to make a decision on TikTok's fate in the U.S. soon, sources told Faber.
On Friday, the Department of Commerce announced prohibitions on transactions relating to mobile applications WeChat and TikTok to "safeguard the national security of the United States." In a statement, Commerce said, "The Chinese Communist Party has demonstrated the means and motives to use these apps to threaten the national security, foreign policy, and the economy of the U.S. Today's announced prohibitions, when combined, protect users in the U.S. by eliminating access to these applications and significantly reducing their functionality."
As of September 20, 2020, the following transactions are prohibited: Any provision of service to distribute or maintain the WeChat or TikTok mobile applications, constituent code, or application updates through an online mobile application store in the U.S.; Any provision of services through the WeChat mobile application for the purpose of transferring funds or processing payments within the U.S. The President has provided until November 12 for the national security concerns posed by TikTok to be resolved. If they are, the prohibitions in this order may be lifted, the department added.
3. COVID AID PACKAGE: President Trump has urged GOP lawmakers to embrace a bigger COVID-19 stimulus package as a top White House aide showed more optimism about reaching an agreement with Democrats, CNBC's Jacob Pramuk reported on Wednesday. In a tweet, Trump told Republicans to "go for the much higher numbers" in legislation meant to boost an economy and healthcare system struggling amid the pandemic.
4. AID TO U.S. OIL REFINERS: The White House is mulling at least $300M in cash assistance to U.S. oil refiners that are denied exemptions to U.S. biofuel blending laws for the 2019 compliance year, Reuters' Stephanie Kelly and Jarrett Renshaw reported earlier this week, citing two sources familiar with the matter.
Although the Trump administration has not yet ruled on the waivers, it has made an estimate for the amount of funds it would provide in relief based on the number of facilities that applied for the exemptions but may not be considered ineligible due to a recent court ruling, the authors say. Publicly traded companies in the space include Delek US (DK), HollyFrontier (HFC), Marathon Petroleum (MPC), Phillips 66 (PSX), Tesoro (TSO), Valero (VLO) and Western Refining (WNR).
"Week in Review" is The Fly's weekly recap of its recurring series of "Trump Effect" exclusive stories.