Pharma, Policy

Merck CEO takes a stand and resigns from Trump’s Manufacturing Council (Updated)

Frazier’s departure was later followed by a string of executive resignations from the manufacturing council this week before Trump announced Wednesday he would disband it.

By Stephanie Baum on August 14, 2017

U.S. President Donald Trump with Merck CEO Kenneth Frazier speaks during the opening of a listening session with manufacturing CEOs at the White House February 23, 2017.

This post has been updated to include remarks President Donald Trump made Monday afternoon and subsequent departures from the manufacturing council. As of 2:30 pm August 15, we’re up to four!

Merck CEO and Chairman Kenneth Frazier has quit President Trump’s American Manufacturing Council in a move that seems to be in response to Trump’s comments on the violence in Charlottesville, Virginia over the weekend at a white nationalist rally. Although he condemned the “hatred, bigotry and violence on many sides — on many sides,” Trump declined to single out white nationalists.

Trump being Trump retorted on Twitter:

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The attack runs counter to comments Trump made during a January meeting between seven biopharma leaders, including Frazier, and the newly-elected president. While Trump acknowledged then that drug prices were high, he attributed the blame to “freeloading” foreign nations and the immense regulatory burden drug developers face.

Frazier notified some Merck board members of his decision Sunday evening, The New York Times reported. One of them, Leslie Brun, said he supported Frazier’s decision and expressed dismay with Trump’s response.

As for Mr. Trump’s reaction, Mr. Brun added, “I thought the pettiness of the president’s response, on a personal level, is indicative of how far we’ve sunk.”

Frazier’s departure leaves Johnson & Johnson CEO and Chairman Alex Gorsky as the one remaining executive from the pharma and medtech industry on the Manufacturing Council.

While Frazier is the first person to step down over Trump’s comments on Charlottesville, Reuters noted, several other high profile business people took action over his withdrawal from the Paris Climate Accord. Elon Musk, CEO of SpaceX and Tesla, and Bob Iger, CEO of Disney, both announced their exits from Trump’s Advisory Councils following that decision in June.

Trump has received criticism from leaders in his own party and Democrats for not going far enough to condemn neo-Nazi and Ku Klux Clan movements. Some noted with irony Trump’s swift reaction to Frazier’s departure from his council — less than an hour after his initial statement was released on Twitter — compared with the amount of time it took Trump to comment on the events in Charlottesville.

The Justice Department opened a civil rights investigation into a car ramming attack that claimed one life and left many injured in Charlottesville.

Merck’s stock price rose 1 percent after the company released Frazier’s statement. Merck did not immediately respond to requests for additional comment.

Update Trump issued a brief statement Monday afternoon more forceful than the comments he made on Saturday in which he specifically denounced hate groups, according to media reports, including The Hill:

“Racism is evil and those who cause violence in its name are criminals and thugs, including the KKK, neo-Nazis, white supremacists and other hate groups that are repugnant to what we hold dear as Americans.”

Update Under Armour announced late Monday that CEO Kevin Plank would step down as well. Like Frazier, he was not explicit in his rationale but it could be easily inferred, according to the company’s website.

“I joined the American Manufacturing Council because I believed it was important for Under Armour to have an active seat at the table and represent our industry. We remain resolute in our potential and ability to improve American manufacturing. However, Under Armour engages in innovation and sports, not politics.

I am appreciative of the opportunity to have served, but have decided to step down from the council. I love our country and our company and will continue to focus my efforts on inspiring every person that they can do anything through the power of sport which promotes unity, diversity and inclusion.”

Update Intel CEO Brian Krzanich also announced Monday evening that he, too, had stepped down from the council in a blog post on the company’s website.  

His comments suggest his decision was motivated by Trump’s tweet attacking Frazier over his decision to step down from the council:

I have already made clear my abhorrence at the recent hate-spawned violence in Charlottesville, and earlier today I called on all leaders to condemn the white supremacists and their ilk who marched and committed violence. I resigned because I want to make progress, while many in Washington seem more concerned with attacking anyone who disagrees with them. We should honor – not attack – those who have stood up for equality and other cherished American values. I hope this will change, and I remain willing to serve when it does.

Update And another! On Tuesday Scott Paul, the president of the Alliance for American Manufacturing, became the fourth person to step down from the council. In a tweet, he got straight to the point:

Update Guess what? Yes, another resignation from the council. This time it’s Richard Trumpka, the president of the AFL-CIO. His decision was motivated by Trump’s news conference Tuesday afternoon.

Update And then there were none! The steady drip of executive departures from the manufacturing council in the wake of Trump’s inflammatory news conference on Tuesday afternoon led to a Trump tweet announcing he would disband the council. A Wall Street Journal story notes that executives serving on the Strategic and Policy Forum organized a conference call and made the decision to break it up.

Juliet Preston contributed to this story

Photo: Win McNamee, Getty Images