Donald Trump has once again caused stock market volatility to an industry sector. This time taking on the pharmacological industry. He has claimed that the industry is “Getting away with murder” because of the prices that they charge the American healthcare system.
Trump has claimed that he intends to change the practices of the industry. The claim sent prices diving in the sector. The worry is that Trump will come in and place tough restrictions on the sector, that they will desperately try to avoid.
This isn’t the first time that Trump has aimed both barrels at large business. Recently he had been involved in spats with defence contractors over costs. These costs are ones that he had also promised to go to war against.
It appears that the industry is edgy already. Pricing is a sensitive subject, and many in government actually support Trump’s viewpoint, if not his methods. It will be interesting to see what his team can come up with. Government is already investigating inflated costs from the industry over many rudimentary products that ar used in healthcare. A negative result in this investigation could cause stocks to spiral, as it would be expected that there would be a government reaction.
Trump had already floated a few suggestions for the future of dealings with the industry. He had suggested that there could be negotiations which were currently illegal. He had also floated the idea of making importing of medical drugs easier to the US. This would have a dramatic effect on pricing, as many other countries benefit from cheaper medicines.
Trump’s aim at Medicare spending is easy to understand. The programme supports American elderly and disabled people. They currently support the healthcare of 55 million people in the US. In 2015 they spent $325 billion on medicine. With the population increasingly ageing, that pressure will only continue. It will be down to government to improve the situation and try to reduce the costs involved in the purchase of the medicine.
This is part of the bigger picture of changes to the American healthcare system that Trump sees as necessary. This along with his promise to remove “Obamacare” as soon as he gets in to office, means that the landscape is likely to be very different at the end of his term. But for those currently supported by the system, their worries will only increase.
Joseph is a 34 year old freelance writer from London. He has a wide interest in politics and specialises in the subject. He's also a blog writer in his spare time.