fra Citywire
Clear winners
Rudi Van den Eynde, who manages the Candriam Equities B Global Health Care fund, said Trump’s win is positive for the industry. He does not believe the retraction of Obamacare would have a major impact on the biotechnology sector.
A Republican sweep offers greater power to this party and the caveat is that Trump’s ultimate policies are not exactly carved in stone, but the worst case scenario for the drugs industry of a Democrat sweep is clearly off the table
The only clear policy towards drug pricing seems the push towards more importation of drugs from other countries as prices are lower OUS-in practice, the FDA has been blocking this in the past while drug companies can counter this by limiting and monitoring supply towards other countries.
The Republican Party clearly sides with the pharma industry and favours innovation and the strong international competitiveness of the US drug industry over other considerations
Despite probably being lost in translation, yesterday California voted on the so called Proposition 61, which would have put pressure on drug pricing, and voted against this proposition- this is a major positive.
Obamacare might be repealed (if legally do-able) but this does not have a major impact on the biotechnology sector. It would be very negative for hospital stocks and some selected health insurers but we obviously are not invested in them.
Pro innovation
David Pinniger, who manages the Polar Capital Biotechnologyfund, did not anticipate a Trump win but said it is a positive for healthcare. He will not make any major changes to the fund and is currently positioned for a relief rally.
It is a massive positive for healthcare – it is huge. Given the sentiment overhang on all of healthcare, particularly pharma and biotech stocks in the past 12 months or so we think healthcare particularly healthcare and biotech stocks could bounce significantly on the back of this over the next few weeks.
A Hillary victory would be an agenda for the next four years where you would have seen a lot of heightened scrutiny over pricing practices, behaviour of drug companies etc. All of that has been taken off the table now. Trump is President Elect, Republicans have retained convincing control of both the House of the Representatives and the Senate, so that agenda is gone, it’s finished.
The Proposition 61 ballot, where there is this proposal that the state would pay VA [Veterans’ Association] prices for drugs rather than relatively higher prices than they currently pay, that was voted against. Which is an incremental positive but it also takes off the table the probability that states could follow California’s lead to try and drag down drug prices over time.
The Republicans are very pro-innovation, they are behind private sector solutions. Aside from Trump, we are very much focused on what Paul Ryan, the leader of the house of representatives, said about healthcare and how to move forward with healthcare.
If you read through his agenda items from earlier this year, he was very constructive when it came to the biopharma industry, wanting to put in place a lot of support for early stage research and for biomedical innovation to drive patient choice and progress.
