Market Overview

Analyst Offers 3 Reasons To Ignore Trump's Comments On Drug Prices

Analyst Offers 3 Reasons To Ignore Trump's Comments On Drug Prices

Chris Meekins, an analyst at FBR, was a guest on CNBC's "Halftime Report" segment on Wednesday and offered three reasons why pharmaceutical investors should brush off President-elect Donald Trump's comments that he is "going to bring down drug prices."

3 Reasons

First, Meekins argued what is more important than Trump's commentary in an interview is who he picked to serve as advisers and within his cabinet. For example, Trump appointed Congressman Tom Price of Georgia, an orthopedic surgeon and vocal opponent of Obamacare, as secretary of health and human services. According to the analyst, the congressman is a "free market, traditional republican," and someone who "believes in free market."

Second, Meekins stated that the U.S. Congress would need to change existing law to be able to negotiate drug prices.

"I would argue if you look from a policy perspective — and the reality is these stocks have been hit — because people have been afraid of what could happen from a policy perspective, not because of what has happened from a policy perspective," the analyst expanded. "This is a lot of headline risk but not a lot of real changes from a policy perspective."

Finally, Meekins suggested that Trump is merely "someone who likes to negotiate not because he understands the healthcare industry or is that interested in it."

Bottom line, Meekins believes that Trump is in the midst of assembling a team of experts led by Congressman Price who all have "clear views."

Since Election Day, iShares NASDAQ Biotechnology Index (ETF) (NASDAQ: IBB) is up roughly 2 percent. The Health Care SPDR (ETF) (NYSE: XLV) is down roughly 0.5 percent over the same period.

Image Credit: By Presidential transition of Donald Trump website (permission). ( [CC BY 4.0], via Wikimedia Commons

Posted-In: Chris MeekinsBiotech News Health Care Politics Movers Media General Best of Benzinga


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