• November 10, 2016

How to View the Bull Rally for US Pharma

How to View the Bull Rally for US Pharma

635 353 Sodhi Pricing Associates

US pharma companies, such as, Pfizer, Merck, and Allergan are experiencing a bull rally. The Nasdaq Biotech Index rose 9% within a day of Donald Trump’s election victory because drug makers expect a friendlier regulatory environment. Large health insurers, Cigna, Aetna, and Humana, saw 8-12% gains despite rising drug costs given the prospect of repealing of Affordable Healthcare which these companies are already abandoning for lack of profits.

The debate over high drug costs in the US is tilted in favor of hard-hearted economics. Pharma executives contend that their drugs save lives hence priced in keeping with their value. Yet they sell same drugs in other countries at much lower prices where patients can afford less.  IN 2013, the National Health Interview Survey (Center for Disease Control and Prevention) published a brief titled, Strategies used by Adults to Reduce the Prescription Drug Costs, that highlighted:

  • Approximately one-fifth (18%) of the $263 billion spent on retail prescription drugs in the United States in 2012 was paid out of pocket.
  • To save money, almost 8% of U.S. adults (7.8%) did not take their medication as prescribed, 15.1% asked a doctor for a lower-cost medication, 1.6% bought prescription drugs from another country, and 4.2% used alternative therapies.
  • Adults aged 18–64 (8.5%) were nearly twice as likely as adults aged 65 and over (4.4%) to have not taken their medication as prescribed to save money.
  • Among adults aged 18–64, uninsured adults (14.0%) were more likely than those with Medicaid (10.4%) or private coverage (6.1%) to have not taken their medication as prescribed to save money.
  • The poorest adults—those with incomes below 139% of the federal poverty level—were the most likely to not take medication as prescribed to save money.

If drug prices spin out of control any further, these statistics are expected to get worse. The dissatisfied majority that voted for change comprises of the poorest as well as the entitled like in any society. The new administration better take a humanistic view otherwise the masses will be burdened by healthcare that heals very few.

Sources:

Hillary Clinton’s Defeat Provides Antidote for US Drug makersFinancial Times, David Crow, Nov 10, 2016

Strategies used by Adults to Reduce the Prescription Drug Costs: United States, 2013, National Center for Health Statistics, Robin A. Cohen, Ph.D.; and Maria A. Villarroel, Ph.D., 2013

Strategies used by Adults to Reduce the Prescription Drug Costs: United States, 2013, National Center for Health Statistics, Robin A. Cohen, Ph.D.; and Maria A. Villarroel, Ph.D., 2013

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