What happened

The sun shone brighter than usual on California's largest biotech last month. Shares of Amgen, Inc. (NASDAQ:AMGN) rose 10.2% in June, according to data from S&P Global Market Intelligence. It wasn't their intention, but separate actions from the FDA and the Trump administration eased some investor concerns.

So what 

Neulasta, Amgen's anemia drug for cancer patients, earned its first approval 15 years ago. The threat of biosimilar competition for the aging product has been looming, presenting a big worry for Amgen since Neulasta generates roughly 23% of the company's total product sales . Amgen received a reprieve on June 12 when the FDA rejected an application for CHS-1701, a copycat version of Neulasta being developed by Coherus Biosciences Inc.

Hand drawing digits sloping upwards.

Image source: Getty Images.

About a week later, a draft of an executive order from the Trump administration alleviated fears that the president would make good on promises to limit biopharma's pricing power. In fact, it looks as if the present administration might grant Amgen and its industry peers a few wishes.

Now what

One proposal within the draft executive order aims to beef up intellectual-property protections for drugs sold outside America's borders, an industry sore spot that would have been addressed by the now defunct Trans-Pacific Partnership trade agreement. 

The draft order also aims to roll back the 340B drug discount program. The 25-year-old program requires Amgen and its peers to provide certain drugs to certain healthcare providers at reduced prices. Over the years plenty of lobbyists, and a handful of lawmakers, have complained that some healthcare providers are in effect profiting from the program at drugmakers' expense.

Neulasta and several other Amgen products are sold at a discount through the 340B program. The company doesn't disclose how much of its product revenue stems from 340B eligible purchasers, and it certainly doesn't disclose just how heavily its drugs are discounted from their list prices. It's hard to see how ending the 340B program would lower overall spending on prescription medicines, but its cessation would almost certainly bolster Amgen's bottom line to some degree.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.