Healthcare | Brunswick Group


An effective repeal of the Affordable Care Act (ACA, or Obamacare) is both high on Trump’s agenda and likely to occur.

The Affordable Care Act

An effective repeal of the Affordable Care Act (ACA, or Obamacare) is both high on Trump’s agenda and likely to occur. President-elect Trump stated just last week that he will ask Congress to repeal the healthcare law on his first day in office. After the election, Senate Majority Leader Mitch McConnell (R-KY) said that repealing the law was “pretty high on our agenda.” Even though the Republicans lack the 60 Senate votes needed for an outright repeal, they could use reconciliation—a budget procedure that requires a simple majority to pass—to dismantle key provisions of ACA, including the individual mandate, required coverage for pre-existing conditions and an excise tax on medical devices.

Though the repeal of the healthcare law is likely, the question is whether it is politically viable for Congress to strip 22 million Americans of their insurance coverage, according to a Congressional Budget Office estimate, without alternative legislation. To that end, Trump has called on Congress to lead on developing a healthcare reform alternative. House Speaker Paul Ryan (R-WI) outlined a Republican proposal this summer that included longstanding GOP ideas, such as a tax credit to help people afford coverage, private competition to Medicare, and a cap on government Medicaid payments. Key details, such as funding the tax credit, have yet to be hammered out, and it is unclear whether a draft bill would receive broad support even among Republicans.

Drug pricing

During his campaign, Trump was critical of the pharmaceutical industry. In fact, he agreed with Clinton on a couple of proposals that would undermine the industry’s pricing power. Specifically, Trump has said that he would allow Medicare to negotiate drug prices directly with pharmaceutical companies and allow the import of drugs from outside the U.S., adopting long-held Democratic positions. Next year, the Prescription Drug User Fee Act is up for renewal, and the law’s “must-pass” status has historically made it a vehicle for pushing drug policy changes. The Trump White House may use the occasion to push through similar consumer-friendly proposals.

On the other hand, Trump was noticeably silent over the past year as a number of drug pricing scandals emerged, including Turing, Valeant and Mylan. By contrast, Clinton proposed restricting dramatic price hikes on lifesaving medications and sought to challenge “pay for delay” schemes,” where companies buy generic drug patents to keep them off the market. Given his mixed rhetoric, U.S. biotech stocks may owe their post-election rally more to Clinton losing than Trump winning.

Brunswick partner David Seldin shares his insights on the likely healthcare priorities of the new administration.