ICYMI: High Drug Costs Impact Wall Street and Spark a New Initiative in the White House

April 28, 2015

Note: Distributing the New York Times article below is not an endorsement for President Obama’s proposed initiative. 

New York Times: Obama Proposes That Medicare Be Given the Right to Negotiate the Cost of Drugs

“Five years after passage of the Affordable Care Act, drug prices are emerging again as a political issue. On a presidential campaign stop in Iowa this month, Hillary Rodham Clinton said the government needed to drive a harder bargain with drug companies. In the latest monthly poll by the Kaiser Family Foundation, the health care priority cited most often, by Democrats and Republicans alike, was making high-cost drugs affordable to people who need them…

…More than 40 million people have prescription drug coverage through Medicare. The overall cost has been significantly less than originally projected in 2003. But an influential federal panel, the Medicare Payment Advisory Commission, told Congress last month that the “use of high-cost drugs poses a big challenge” for the government and for Medicare beneficiaries, who typically pay 25 percent to 33 percent of the cost of specialty drugs.”

ReutersWall St. ends down as biotechs drop 4 percent

“Healthcare companies have been the top performers so far in 2015, helping push major stock indexes to records. Biotechs in particular have driven up the Nasdaq, which last week reached its first all-time closing high in 15 years. The sector is being dragged down by reports of high pricing by specialty pharmaceutical companies as well as the disappointing news from Celladon and Amgen, said Paul Yook portfolio manager of biotech exchange traded funds (BBC.P) and (BBP.P) at LifeSci Partners in New York.

“Drug pricing has been a real concern for investors,” he said.”