October 26, 2018

Health Care Roundup: Drug Companies Are Happy, Consumers Are Screwed

Was I too tough on President Trump yesterday? After all, his new Medicare policy on pharmaceuticals will lower prices if he follows through with it. But will he? And will it really make much of a difference even if he does?

Well, there’s one group of experts who don’t seem too worried: Wall Street investors. Here’s how the stock market reacted over the past few days:

On Wednesday, when the White House announced Trump’s speech, investors were nervous and pharmaceutical stocks dropped. But on Thursday they started hearing soothing rumors, and a little after 2 pm they heard the speech itself. Pharmaceutical stocks spiked up as everyone realized that nothing bad was happening. Then they drifted down a bit until the market closed and drifted up after the opening bell today.

None of these movements were huge. But that’s the point: it’s pretty obvious that investors and analysts aren’t very worried about things. They simply don’t believe that Trump’s new Medicare policy is going to have much effect on either sales or profits in the pharmaceutical industry.

And while we’re on the subject of Trump and health care, check this out:

The complete analysis from the Kaiser Family Foundation is here. If Trump had left everything alone, silver-level premiums would have dropped about 16 percent this year. But because of his deliberate efforts to try to ruin Obamacare, premiums will remain about the same. More than likely, this means Trump has failed: despite his best efforts, he hasn’t done enough to have a serious impact on the overall use of Obamacare. “Staying the same” doesn’t give him much of a hook to claim that Obamacare is failing,¹ and he’s obviously lost the fight over pre-existing conditions. This severely limits what he and Republicans can do in the future.

¹Not that he won’t try. And in fairness, this gives liberals a tough PR message too. People don’t get mad at premiums staying the same no matter how much you tell them that without Trump they probably would have gone down.

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