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The Trump Era – Defining the Next Four Years of Healthcare

12th December, 2016


Category: Uncategorized

The past 18 months have been nothing short of dramatic, from Clinton’s historic win of the Democratic nomination to, of course, Trump’s win of the 2016 election.

Time and time again, the pharmaceutical and healthcare industries have come up in presidential debates as an issue of contention; what can really be done to improve:
• Healthcare access
• Healthcare costs
• Healthcare quality

And with this, stormed in Donald Trump.

His challenges on the Affordable Care Act (ACA, a.k.a: Obamacare) did not fall on flat ears and may have been a key driver for choosing to back Trump over Clinton from those yet to reap the benefits that were put in place by the Obama administration.

So, what does this mean for the Affordable Care Act and what changes can be expected?
1. Sales of health insurance plans across state lines: the larger marketplace resulting in greater competition and hence likely reduced premiums
2. Full-health premium tax deductions: ensuring that individuals can benefit from the tax deductions on their insurance plans, as is currently the case with businesses
3. Encouraging Health Savings Accounts: needs further elaboration by the Trump administration, but the current information suggests that it will be applicable for individuals that are not listed as dependents – a greater contribution to HSA’s is expected
4. Greater price transparency: Trump is requesting greater price transparency from insurers, although it is still unclear how this differs from the insurance marketplace that was put in place by the Obama administration
5. Provision of block grants for Medicaid: giving states greater autonomy with the funds allocated to them through the provision of a fixed sum vs. a controlled, allocated budget per function, similar to DRG reimbursement at the hospital level in some markets in Europe, and a growing trend in the MEA region (e.g.: HAAD in Abu Dhabi)
6. Make overseas drug purchases easier: allowing Americans to purchase cheaper drugs from foreign markets, thus placing greater price pressure in the US

Although these 6 factors have been listed as starting points for change, it is yet to be determined which of these practices will actually be introduced and how, and the extent to which the whole of the Affordable Care Act will be repealed. As it stands, Trump’s strong stance on abolishing Obamacare seems to have been more of a campaign tactic, as existing changes as detailed are not drastic changes, but amendments to existing bylaws within the ACA.

What does this mean for the pharma industry in the US and globally?
1. Unexpected changes likely to be seen in patient volumes
2. Price challenges: lower US prices may result in non US markets seeing lower prices in local markets too
3. An increase in parallel imports; generally, a dynamic experienced strongly in Europe, with potential for starting in the US if borders are opened

The full force of the effect will of course not be known until the changes to the ACA policies are made more concrete, and only time will tell if the new policies will really increase healthcare coverage.

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