The president-elect, Donald J. Trump, has made it clear during his campaign that he wants to repeal the Affordable-Care Act (“ACA”). However, his plans for implementing a new healthcare plan and his stance on regulating drug prices is very uncertain.
If the ACA is repealed, it would leave more than 20 million people without health insurance and end certain benefits such as free birth control and coverage under parents’ health insurance through the age of 26. Repealing the ACA would also get rid of some of the regulations in place for keeping drug prices low.
However, biotech and drug stocks can rejoice in the lifting of these regulations. The ACA has been restricting some of the potential profit of these large healthcare companies by forcing them to offer more widespread care and putting pressure on pharmaceutical companies to lower drug prices.
A Clinton presidency for healthcare and biotech stocks would have been further devastating given her strong stance on cutting drug prices.
Another one of the concerns is that Trump will not make drug pricing a priority in his campaign. He has been unclear about his policies, occasionally endorsing importing cheaper drugs from abroad and support for Medicare negotiating lower drug prices, both of which are views that deviate from the traditional Republican view.
However, Trump and the Republicans are united in their intention of abolishing Obamacare. A Republican makeover of health care policy would lead to fewer insured Americans and lower availability and utilization of prescription drugs.
Without a super-majority in the Senate, Trump’s efforts to repeal the ACA will be impossible without bipartisan support; in this aspect without support from both sides his impact on the pharmaceutical companies will be very limited.
Trump has mentioned that he would allow different health insurers to complete across state borders, which he claims would keep costs low. However, health experts disagree with this statement and say that having competition between states would have large implications for the healthcare sector.
Overall, Trump’s main impact on both the pharmaceutical and biotech industries are limited to what he can accomplish regarding repealing the ACA.
If the Republicans can manage to repeal the ACA, healthcare companies could expect to see an increase in profits when the restrictions on pricing are removed and when they are no longer obligated to insure every American. Without Clinton pressuring drug companies to keep prices low, pharmaceutical companies might benefit from the ability to raise prices.
The outcome of the pharmaceutical and biotech industries are about as unclear as Donald Trump’s policies regarding those industries.