Trump Effect: Week In Review – Friday, March 10

This week, health care reform was in the spotlight, with the House Republicans introducing the “American Health Care Act,” intended to repeal and replace the so-called “Obamacare.” Meanwhile, President Donald Trump once again took to Twitter to discuss drug pricing, reiterating his commitment to increase competition in the pharmaceutical sector.

HEALTH CARE: On Monday night, House Republicans introduced the “American Health Care Act,” which is intended to dismantle and replace the Affordable Care Act. The legislation would no longer penalize those who fail to have health insurance, but encourages people to maintain coverage by allowing insurers to impose a surcharge of 30% for those who have a gap between health plans. Additionally, it would preserve two of Obamacare’s popular features, forbidding insurers to deny coverage to people with pre-existing conditions and allowing young adults to stay on their parent’s health plans until the age 26. Further, the American Health Care Act would eliminate subsidies and replace them with tax credits, and would freeze the expansion of Medicaid. Publicly traded companies in the hospital space include Community Health (CYH), HCA Holdings (HCA), LifePoint (LPNT), Tenet (THC) and Universal Health (UHS), while publicly traded companies in the health insurance space include Aetna (AET), Anthem (ANTM), Centene (CNC), Cigna (CI), Health Net (HNT), Humana (HUM), Molina Healthcare (MOH), UnitedHealth (UNH) and WellCare (WCG).

PHARMACEUTICAL SECTOR: On Tuesday, a tweet from President Donald Trump about drug pricing sent pharmaceutical stocks like AstraZeneca (AZN), Bristol-Myers (BMY), Eli Lilly (LLY), GlaxoSmithKline (GSK), Merck (MRK), Novartis (NVS), Pfizer (PFE), Roche (RHHBY) and Sanofi (SNY) down. “I am working on a new system where there will be competition in the Drug Industry. Pricing for the American people will come way down!,” the tweet read.

BIOTECH SECTOR: FBR Capital analyst Chris Meekins told investors earlier in the week that the potential for tax reform under the new U.S. administration and Food and Drug Administration policy changes could be “prime” for acquisitions of clinical-state biotech companies by “Big Pharma.” With a likely increase in mergers, FBR Capital’s Meekins believes companies like Tesaro (TSRO), Agile Therapeutics (AGRX), Kite Pharma (KITE), Juno Therapeutics (JUNO), Acceleron Pharma (XLRN), Abeona Therapeutics (ABEO), Aurinia Pharmaceuticals (AUPH), Geron Corporation (GERN), and Genocea Biosciences (GNCA) could be “primary targets” for those looking to make acquisitions.