Pharmaceutical shares have surged in Europe following Donald Trump’s shock victory in the US presidential elections as fears ebbed of a crackdown on prices.
GlaxoSmithKline, AstraZeneca and Shire were among the beneficiaries as major companies saw stock rises of between 2% and more than 6%.
That followed the Republican president-elect’s defeat of rival Hillary Clinton, who had repeatedly criticised pharma pricing.
Nevertheless, there remains much uncertainty about Trump’s exact position on the industry and healthcare in general.
He has previously noted that drug companies provide a public service and said he would “remove barriers to entry into free markets for drug providers that offer safe, reliable and cheaper products”.
His current position on pharma states: “Congress will need the courage to step away from the special interests and do what is right for America.”
Moreover, Trump’s aggressive stance on American’s trade deals, which he has promised to renegotiate, could have serious repercussions for the industry.
Where there is certainty is in Trump’s critical attitude towards the Affordable Care Act for its “runaway costs, websites that don’t work, greater rationing of care, higher premiums, less competition and fewer choices”.
The Act, often referred to as Obamacare, extended medical insurance coverage to around 32 million uninsured Americans and involved a major expansion of the Medicaid programme.
At its heart was the introduction of an ‘individual mandate’, requiring all Americans to buy a minimum level of health insurance from 2014 or be subject to a fine.
In contrast Trump’s plan is to repeal the Act and “bring much-needed free market reforms to the healthcare industry”.
In its stead he has promised to improve healthcare access, affordability and quality of the care, the latter by harnessing free market principles.
He has also suggested increasing competition in the health insurance market and establishing tax-free Health Savings Accounts for individuals to pay for their care.
Alongside Trump’s win in the US presidential elections the Republicans continue to control the Senate and House of Representatives, giving them a chance to break the gridlock that hampered the current administration.
That saw Democrat Barak Obama’s second term of office hamstrung by a Republican-controlled house and then, from 2015, a Republican majority Senate as well.