In the wake of US mid-term election results, which saw Republicans lose control of the House of Representatives, but increase their hold on the Senate, analysts suggested that the outcome reduced the likelihood of major legislation targeting drug pricing. Credit Suisse analyst Lorenzo Biasio, who described the outcome as a "best-case outcome for pharmaceutical and biotech stocks," commented "with a split Congress, the base case is that a limited amount of legislation will move forward."
RBC Capital Markets analyst Brian Abrahams, who also described the results as a "best-case scenario," agreed that the split Congress could preclude measures to influence drug pricing. In addition, Height Capital Markets analyst Andrea Harris noted that there is "headline risk ahead, but Republican Senate and pharma-friendly Democrats will prevent disruptive policy change."
Analysts at Goldman Sachs said that the House could pass drug-pricing reforms that would then be blocked by the Senate. However, the analysts cautioned that Senate Republicans could be pressured to reach a compromise on the issue given Trump's support of pricing reforms.
Meanwhile, House Minority Leader Nancy Pelosi indicated that Democrats were open to working with President Donald Trump to reduce drug prices. "I think we could find common ground on reducing the cost of prescription drugs, if the president is serious about his saying that he wants to do that," Pelosi remarked.
The news comes after Trump announced plans for a measure that would link the prices Medicare pays for drugs to an international index. The President, who has previously hinted that he would unveil measures targeting drug pricing, had earlier disclosed proposals seeking to reduce drug prices and foster competition.
In addition, Health and Human Services Secretary Alex Azar recently warned drugmakers to assist in efforts to lower patients' out-of-pocket costs or "get whatever comes at you."
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