Sector grouping of large-cap US pharmaceutical and biotechnology companies engaged in drug development and commercialization.
2 takes · first discussed May 17, 2025
Private company — no public price to score. We track what they said; valuation-mark tracking is on the roadmap.
Chamath warns that Trump's MFN drug pricing EO, combined with already-thin pharma ROI (~1.5%) and soaring trial costs, risks further suppressing R&D investment and pushing innovation offshore to China.
Ben Shapiro argues Trump's MFN drug pricing EO will suppress pharma R&D and raise costs for private insurance holders by squeezing manufacturer margins rather than pressuring foreign governments to pay their fair share.
Both Chamath and guest Ben Shapiro view Trump's Most Favored Nation (MFN) drug pricing executive order as a meaningful threat to the large US pharma and biotech sector, though neither expresses high conviction. Their core shared concern is that compressing manufacturer margins will discourage R&D investment, with Chamath pointing to already razor-thin industry ROI of roughly 1.5% as evidence that further profitability pressure could push innovation activity offshore — particularly to China. Shapiro adds that the policy may also raise costs for privately insured Americans and fails to address the root issue of foreign governments underpaying for drugs. The two are broadly aligned in their bearish read on the policy's consequences, with Chamath taking a slightly more neutral, structural view and Shapiro expressing a more direct negative verdict on the EO's design.
Chamath warns that Trump's MFN drug pricing EO, combined with already-thin pharma ROI (~1.5%) and soaring trial costs, risks further suppressing R&D investment and pushing innovation offshore to China.
The average ROI for broad-based pharma is 1.5% as of 2022. If you then further affect the profitability scale of pharma, the impact is probably that we push R&D to different places.”1:28:40
Ben Shapiro argues Trump's MFN drug pricing EO will suppress pharma R&D and raise costs for private insurance holders by squeezing manufacturer margins rather than pressuring foreign governments to pay their fair share.
If you want to kill R&D, this is a great way to kill R&D. People in the United States, I don't think, have a clue as to how much money gets spent on R&D that craps out.”1:32:03