With all eyes of on him, President Donald Trump delivered his first speech to Congress, with a long list of requests for them regarding the status of health coverage in the country.
During his speech, Trump asked for unity between Democrats and Republicans in repealing the Affordable Care Act, introduction and support for a new Republican made health care insurance program. He appealed for the FDA to speed up their review process for new drugs since, he said, it prevents too many advances from reaching people in need. While appealing for Democrats to work in cooperation with his administration, Trump repeatedly called Obamacare a disaster and said it was “collapsing”– a statement called an exaggeration by the New York Times’ fact-checker.
President Trump laid out five steps during his speech on how he wants to congress to support a new health care program in the country.
“We should ensure that Americans with pre-existing conditions have access to coverage and that we have a stable transition for Americans currently enrolled in the health care exchanges,” he said.
Through tax credits and expanded health savings accounts, he said, Americans could purchase their own coverage while stating a common Republican phrase when attacking Obamacare: “It must be the plan they want, not the plan forced on them by our government.”
During the introduction of the Affordable Care Act, Democrats promised people would be able to keep their same plans and their same doctors, a statement that has been criticized and disputed by Republicans.
Obamacare not working for some Republican states
Trump said governors from Arizona and Kentucky told him Obamacare was “failing” in their states. “We should give our state governors the resources and flexibility they need with Medicaid to make sure no one is left out,” Trump said, greeted by applause from the Republican majority.
Trump asked for unity on the Congress floor to immediately bring down the “artificially high price of drugs.” He also said there are “unnecessary costs driving up the price of insurance.”
Keeping with his plan of a competitive insurance market for everyone, Trump said he would give Americans the freedom to purchase health insurance across state lines.
Passed by a Democratic congress in 2010, the Affordable Care Act, or Obamacare as it was commonly referred to, is a set of health insurance and industry reforms to expand health coverage for American citizens. This program allowed an expansion of Medicaid and the option for people to choose insurance coverage online with financial support from the federal government.
Trump made an appeal for both parties to work together towards achieving seemingly non-Republican goals: paid family leave, invest in women’s health, “promote” clean air and water, and to provide investment for the military and infrastructure.
After introducing Megan Crowley, diagnosed with Pompe disease when she was 15 months old, Trump said the Food and Drug Administration (FDA) often takes too long to provide the drugs that help people like his guest.
Crowley’s father, Amicus Therapeutics (NASDAQ:FOLD) CEO John, was shown next to Megan. He started a company to find a drug to save her from the initial life six-month life expectancy, and eventually created an enzyme replacement therapy for her.
Trump criticized the FDA further by saying its review and approval process is slow and burdensome.
“If we slash the restraints, not just at the FDA but across our government, then we will be blessed with far more miracles just like Megan,” Trump said. It wasn’t clear what kind of government restrictions he was referring to.
In early Feb. Trump called for a faster regulation process for drugs where there wouldn’t be a need for “9,000” page review documents. “Instead… it’ll be 100 pages,” Trump said.
Trump said he would work to streamline the process and get more drugs approved, “when you have a drug you can actually get it approved, instead of waiting for many, many years.”
In an emailed note, Oppenheimer senior analyst Hartaj Singh said the FDA approval process is more streamlined than ever, however with little detail from Trump a divided congress will probably not help with this proposal.
“Right now drug pricing is a more important topic for most specialist and generalist healthcare investors,” Singh said.
Lewis Alexander with Nomura Securities International said the current health insurance replacement issues serve as a message for the market to realize Trump’s spending and tax initiatives could be more difficult than they appeared to be.
Chief U.S. economist with Capital Economics, Paul Ashworth said when it comes to tax reform, the situation could take up to 12 more months, if not longer.
Details on the new health care plan were thin, but Trump’s call for change in healthcare and the FDA approval process bodes well for the biotech sector. A look at the NASDAQ Biotechnology Index (INDEXNASDAQ:NBI) today expresses this sentiment. Over the last five days, the index is up by almost 3 percent.
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Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.