President Donald Trump’s impact on the global healthcare industry was thought to be small at first. During his presidential campaign, he often spoke of repealing the Affordable Care Act (ACA), known as Obamacare, but refrained from mentioning pharmaceutical companies, as did his opponent, Hilary Clinton. However, two months after his election, Trump spoke out against excessive price hikes in pharmaceuticals and promised that Medicaid and Medicare would begin negotiating drug prices directly with companies, something currently forbidden by law. This sent pharmaceutical companies into a frenzy and stock prices shot down as a response.
One of the most talked about side effects of Trump’s election in Mexico is the peso’s depreciation against the dollar and other major currencies, such as the euro. This impacts medical companies greatly as 90 percent of active pharmaceutical ingredients are imported, often in dollars. Other companies are based in Europe and do business in euros, also stronger against the Peso than previously.
Here, we take a look at the potential impact a Trump presidency could have on Mexico’s health industry and policies.
The Affordable Care Act, a.k.a. Obamacare
Last week the wheels were set in motion to repeal the ACA as the House followed the Senate in approving a resolution that would dismantle the act. However, much to the dismay of Republicans and penny pinchers, over the weekend the president promised to provide “insurance for everybody.”
The US has one of the most privatized healthcare systems in the world and even the common act of giving birth naturally in the US costs on average US$30,000, according to the BBC, a bill that grows to over US$50,000 if a cesarean is needed. This highlights the importance of health coverage for everyone, something the ACA aimed to give. Among other measures, it gives beneficiaries free preventive care, obliges insurance to cover pre-existing conditions and allow young adults to receive care on their parents’ policies up to the age of 26. Enacted in 2010, the ACA has provided coverage to an estimated 20 million Americans and dropped the uninsured rate to 8.9 percent of the population in the first half of 2016, down from 14.4 percent in 2013, according to CNN figures.
There are other systems that run alongside the ACA, Medicaid and Medicare, created in 1965 and 1966 respectively. Medicare essentially covers those aged over 65, either partially or fully depending on the procedure needed. Medicaid is a program that contributes toward medical costs for those under a certain percentage of the poverty line. In addition to these programs, the Federal Employees Health Benefits Program has provided a choice of over 300 healthcare plans since 1959, including “health, dental, vision and life insurance,” according to the Office of Personnel Management.
Tom Price, Trump’s Head of Health and Human Services, has hinted at post-Obamacare plans to create a tax credit system based on age, which would likely increase costs for average Americans and benefit the rich. However, after months of discrediting the ACA, last weekend Trump loudly promised “insurance for everybody” and lower prices, which was unexpected by all sides of the debate.
Watching how healthcare evolves in the US will be interesting for Mexican health policymakers, as the country suffers from an even more fragmented system than the US and faces an even bigger challenge in implementing universal access. Trump and Price’s meddling in the ACA may prove a “what to do” or a “what not to do” for the next Mexican president and health minister.
Clinton was heavily critical of Turing Pharmaceutical’s 5,000 percent markup after acquiring a single license for 63-year-old off-patent drug pyrimethamine used to treat AIDS patients, labeling it “price gouging.” Trump, in turn, called Turing’s CEO Martin Shkreli a “spoiled brat.” Despite this, expectations during and immediately post-elections remained positive for the pharma industry under Trump.
Spirits plummeted after Trump’s first press conference as president-elect of the US last week, as he declared that pharmaceutical companies are “getting away with murder” considering what they charge the government for medicines. He announced plans for the government to negotiate prices paid through Medicare and Medicaid, as drugs represent a significant portion of US federal expenditure on health.
The president-elect made clear he would change the way the country negotiates for medicine and reduce spending. “We are the largest buyers of drugs in the world and yet we do not bid properly,” he said.
After the statement, Big Pharma stock prices fell as hopes came to a definite end. The top nine Big Pharma companies — Johnson & Johnson, Pfizer, Merck, Amgen, AbbVie, Bristol-Myers Squibb, Gilead, Celgeane and Eli Lilly — lost together around US$24 million on their market value, according to El Economista. Also, the iShares NASDAQ Biotechnology Index closed 3 percent down on Jan. 11, as mentioned by the Washington Post.
One Step Forward, Two Steps Back
Vaccines have been one of the most important medical advances of the past few decades, responsible for the elimination of contagious diseases such as TB and the plague that wiped out scores of the global population. It is worrying that Trump, who has publically spoke of and tweeted that vaccines cause autism, should have met with vaccine skeptics so close to his inauguration.
He has also spoken about creating a committee to review vaccines, which in theory already exists as part of the Center for Disease Control (CDC). This leads many to argue that establishing a second committee is a waste of resources that does little to actually improve healthcare, other than validate a witch hunt. Links between the MMR vaccine in particular and autism have long been proclaimed and have widely been disproved.
In addition, the topic of abortion is difficult as it is deeply personal and Trump has changed his position on this subject numerous times, seemingly to finally settle on a pro-life or anti-abortion position. These vaccine and abortion policies may affect only the US directly but they set a dangerous example for the rest of the world and more importantly for Mexico, its neighbor.