Personal Finance

Guess Who Can't Wait for Trumpcare? (Hint: It's Not the Consumer)

Prescription Drug Pills Stacked On Hundred Dollar Bill Getty
Prescription Drug Pills Stacked On Hundred Dollar Bill Getty

Keeping with the theme of ironies, the real surprise is the group that can't wait for Trumpcare's approval: the drug industry.

Image source: Getty Images.

This group is eager for Trumpcare's approval

If you're scratching your head, you're not alone. Trump has, on many occasions, sacked the valuations of publicly traded drugmakers by making comments about high drug pricing within the past few weeks. In fact, in a recent interview with The Wall Street Journal , Trump suggested the drug industry was "getting away with murder." Those are strong words to suggest that Trump won't idly sweep drug pricing under the rug.

However, in an interview at the World Economic Forum in Davos on Thursday, Jan. 19, the CEO of Swiss-based drugmaker Novartis (NYSE: NVS) , Joe Jimenez, suggested that repealing and replacing Obamacare could be good news for the drug industry. Jimenez notes that the passage of the ACA didn't lead to a big uptick in medicine prescriptions as was once expected. Jimenez blamed this on both the enrollment of younger adults who don't visit the doctor often or take prescription medicines, and the strictness of Obamacare in tying the hands of the insurance industry. High drug prices and copays kept newer specialty medicines off insurer formularies, making it difficult for drugmakers to grow their top and bottom lines.

According to Bloomberg , Roche Holding 's(NASDAQOTH: RHHBY) chairman Christoph Franz concurred with Jimenez in a separate interview. Franz noted that he can't envision millions of Obamacare enrollees suddenly losing their health coverage and not having another plan in place. Franz views a replacement plan as a positive for the drug industry.

To some degree, Jimenez and Franz may have a point. Even with Trump suggesting that he wants to limit the pricing power of drugmakers, Republicans generally favor a free market economy, even if that means higher prices for specialty pharmaceutical products. Plus, it's not as if Trump's proposal to allow overseas pharmaceuticals into America resolves the real issue with drug pricing - that being the initial pricing of newly approved therapies.

We simply won't know the impact on drugmakers until Trump and Republicans lay out a concrete plan. The good news is we should have a plan to examine very soon, which consumers and drugmakers will want to play close attention to.

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Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen nameTMFUltraLong, and check him out on Twitter, where he goes by the handle@TMFUltraLong.The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has adisclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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