Still in the Waiting Room: Outlook for the Healthcare Industry Under the Trump Administration

15 November 2016
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Key takeaways

  • The healthcare industry is likely to face significant changes as a result of the 2016 election and the priorities of the Trump administration and Republican majorities in the House and Senate.
  • Although conventional wisdom suggests that the objectives of the new administration and Congress are good for pharmaceutical companies and bad for hospitals and other providers, the impact on these sectors is likely to be more nuanced.
  • The pharmaceutical industry will likely undergo less regulatory scrutiny on prescription drug pricing, but it could still face pressure if the Centers for Medicare & Medicaid Services is permitted to negotiate Medicare drug prices or if measures are taken to increase competition in the drug marketplace.
  • Hospitals and other providers may see increased demand for some products and services among middle- and upper-income consumers due to premium deductibility and increased availability of Health Spending Accounts. However, they may be hurt if the amendment or repeal of the Affordable Care Act results in a decrease in the number of insured or the loss of the Medicaid expansion, and if there is continued pressure on the pricing of medical services.
  • Tax reform, including measures to stimulate the repatriation of foreign earnings, could spur U.S. investment and M&A activity.