Will more pharmas oppose Trump after Merck CEO's resignation?

Merck CEO Ken Frazier made waves out of the pharma industry when he resigned from President Donald Trump’s manufacturing panel Monday, taking a stand versus"intolerance and extremism" with the violence in Charlottesville. 

Where does that leave for the other drug leaders who’ve worked with the president to push their proposals?

Big pharma companies whose CEOs have had sit-downs with Trump aren't saying much about Frazier's high-profile exit. Some biotech leaders, however, including John Maraganore, CEO of Alnylam, have stepped up to explicitly applaud Frazier's decision.

Roy Vagelos, a former Merck CEO who's now chairman of Regeneron Pharmaceuticals, backed up Frazier's decision in a statement Monday. "I have known Ken for 25 years, since I first recruited him to Merck," Vagelos, a highly respected figure in the biopharma industry, said through a spokesperson. "He is always smart, always ethical and repeatedly makes the right decisions. I applaud his decision to step down from the Council this morning. Ken is driven by a strong sense of morality in everything he does and he continues to make me proud."

Whether more industry leaders—pharma or biotech—follow suit remains to be seen. It's a dilemma that's facing companies regardless of industry. Behind the scenes, as the New York Times reports, CEOs across the business spectrum are furious with the president but aren’t willing to publicly express their anger for fear of retribution. Crisis expert Davia Temin told Axios it’s a conversation going "viral in boardrooms right now."

Johnson & Johnson's Alex Gorsky is the remaining pharma CEO on the manufacturing panel now that Frazier has bowed out. On Tuesday, Gorsky said he'll remain a member of the group in order "to remain engaged, not as a way to support any specific political agenda, but as a way to represent the values of Our Credo as crucial public policy is discussed and developed."

CEOs for Under Armour, Intel and Walmart stepped down from the panel after Frazier’s announcement. PhRMA, which lobbies for drugmakers in Washington, declined to comment on the situation.

The episode highlights a risk drug companies and other businesses encounter dealing with a conflict-prone administration in pursuit of regulatory cuts, tax reform or other measures that would provide them with a boost. Through multiple controversies during President Trump's short time in office, business leaders have faced pressure to rebuke a president who could help their company.

Along with Frazier, execs for Novartis, Eli Lilly, Amgen and Celgene met with the president earlier this year to discuss drug prices, taxes, jobs, innovation and more. Pfizer CEO Ian Read recently said the company has had a "good conversation" with the administration about issues affecting the industry. Companies such as Gilead and Amgen stand to benefit from any potential repatriation holiday the White House can execute.

White supremacists and neo-Nazis protested the removal of a Confederate statue this weekend in Charlottesville, where they clashed with counterprotesters. The violence escalated when a car ran into a crowd of those counterprotesters, claiming the life of one and injuring 19 others. An Ohio man, a white supremacist, was charged with second-degree murder in connection with that attack.

Trump condemned the violence on "many sides," a statement that immediately drew criticism for being too weak and equivocal, and appearing to criticize the counterprotestors along with the white supremacists themselves. On Monday, the president addressed reporters and said the country must "unite together in condemnation of hatred, bigotry and violence."

"Racism is evil," President Trump said. "And those who cause violence in its name are criminal and thugs, including the KKK, neo-Nazis, white supremacists and other hate groups that are repugnant to everything we hold dear as Americans."

But before the president issued his second statement, Merck’s CEO took to Twitter to announce his resignation from the panel. Frazier's statement that he felt a "responsibility to take a stand against intolerance and extremism" prompted a quick response from President Trump.

It remains to be seen just how many pharma execs, if any, will separate themselves and their companies from the White House following the developments. Of course, it isn’t the first time the president’s words and actions have set off a divide in the country. Pharma was largely mum on his travel ban—though some biotech executives condemned it—and most in the industry didn’t weigh in much on the United States’ withdrawal from the Paris climate accord.

Contrary to drug pricing criticism in recent history, Trump’s most recent allusion to "ripoff" prices didn’t worr biopharma investors who’ve seen years of threats come and go without any real action in Washington. In the context of the weekend's violence, drug pricing failed to inspire much pushback.

Editor's note: This story was updated with a statement from Johnson & Johnson CEO Alex Gorsky.