Prop 61 referendum in California fails
It will take quite some time for the actual impact of a Trump presidency and all-Republican Congress to be felt, but the immediate reaction was something of a lift for the pharma industry: the price control policies espoused by Hilary Clinton fall away with her defeat and, at least by mid-day on Nov. 9, pharma stock prices were slightly up in jittery global markets. Analysts attribute that to a traditional investing philosophy that pharma stocks are a safe haven in turbulent markets, and that no new federal initiatives are in the offing in the US, the world’s single richest commercial market for pharma products.
During his campaign, President-elect Trump was no friend of pharma: early on, he espoused opening up the US market to reimported drugs, but that was not a campaign plank as the election neared. Obamacare—federally subsidized health insurance for the uninsured—was clearly not supported and became a recurring theme in his public speeches. However, to the extent that the pharma industry (which had supported Obamacare when it was being legislated) received a bump in increased sales from it, that boost is now very much in doubt.
California’s Proposition 61, which sought to limit the prices received by state-funded health programs for drugs to the rates established by the Veterans Administration, was rejected after extensive lobbying against it by the pharma industry and others, who spent some $109 million to defeat it (supporters spent $19.5 million). The referendum had been supported by the Bernie Sanders wing of the Democratic Party, and opposed by veterans organizations as well as the California Medical Assn., the state’s professional organization for medical doctors.
Meanwhile, medical or recreational use of marijuana has been approved in California, Nevada, Massachusetts, Arkansas, Florida, North Dakota and probably Maine and Montana (votes were still being tallied in the latter two states, while recreational use in Arizona was rejected), making its use now legal in the majority of US states. There have been several small pharma companies developing cannabinoid drugs, but if one can buy a joint at the local dispensary, who needs a pharma company?