(Bloomberg) — “Price-gouging.” “Predatory.” “Outrageous.” Those are just a few of the barbs presidential candidates, including Hillary Clinton, have thrown the way of the pharmaceutical industry this campaign season.
That rhetoric helped sink drug and biotech stocks over the last six months and has overshadowed the candidates’ criticism of the rest of the health care system, including insurers. Yet those businesses could be just as much at risk if the next president, whoever that may be, persists in calling out health care companies on cost.
Investors may want to start paying more attention in particular to Clinton, who emerged from Tuesday’s Iowa caucus in a virtual tie with Democratic rival Bernie Sanders.
“She has a real interest in finding ways to make sure that we keep what people pay for health insurance premiums and what they pay out-of-pocket affordable,” said Ken Thorpe, a health policy professor at Emory University who worked in Bill Clinton’s administration.
Clinton made that clear during a recent event in Iowa. “People may remember that I took on the health insurance industry back in the nineties,” she said.
Her campaign proposal calls for insurers to control costs for health plan members, in part by limiting out-of-pocket expenses. She also wants more government authority to limit health insurance premiums, and has called for scrutiny of big insurer mergers.
Ian Sams, a spokesman for Clinton, declined to comment.
In a radio ad for her campaign, a narrator promises that “Hillary will take on the drug and insurance companies to lower health care costs.” One of her TV commercials, focused on a boy whose family pays $400 a month in medical and drug costs, hits on “premiums, deductibles and co-pays that keep adding up,” calling for insurers to “cap out-of-pocket costs.”
“We’ve got to get health care costs under control,” Clinton has said. And on Twitter, she weighed in on a National Public Radio article about pharmacy benefit managers such as Express Scripts Holding Co. (Nasdaq:ESRX) that push some customers to switch drug regimens. “Companies like these should be ashamed,” Clinton said.
David Whitrap, an Express Scripts spokesman, declined to comment on Clinton’s tweet. The company is “proud of our proven solutions to make medicine more affordable and accessible,” he said.
To be sure, most of the candidates’ proposals would cement the role of private insurers in managing the U.S. health care system. Ted Cruz, who came in first among Republicans in Iowa, wants to repeal the 2010 Patient Protection and Affordable Care Act, expand the role of tax-advantaged savings accounts to help people pay for care, and let insurance companies offer policies across state lines.
Only Sanders has called for limiting the role of private insurers, and instead providing government health plans for all individuals. His campaign had no immediate comment.
Clinton’s plan also maintains a central role for private insurance companies. It would provide tax credits to help individuals with out-of-pocket costs, a move that effectively subsidizes private policies.
America’s Health Insurance Plans (AHIP), a group that represents big health insurers, said it’s important that, rather than blaming the companies, candidates’ plans focus on the reasons for high consumer costs. Those includes high drug prices, and doctors and hospitals whose pay is based on the number of procedures they perform. Limits on out-of-pocket costs alone won’t help, the group has said.
“What it comes down to is, how do we make the system more affordable for consumers,” said Clare Krusing, an AHIP spokeswoman. “Plans are doing everything they can to keep coverage affordable.”
Pharmaceutical Research and Manufacturers of America (PhRMA) declined to comment on the political posturing of the campaigns. The drug industry trade group has said plans like Clinton’s would “restrict patients’ access to medicines” and limit innovation.
Clinton’s proposals mainly build on the Patient Protection and Affordable Care Act (PPACA), said Ipsita Smolinski, a managing director at Capitol Street, which advises clients on health policy. After President Barack Obama spent the first years of his administration overhauling the health care system, Clinton’s tweaks appear less radical, she said.
“She’s actually a pragmatist,” Smolinski said. “She wants to keep the Affordable Care Act intact and make tweaks if they’re needed.”
—With assistance from Elizabeth Titus.
Are you following us on Facebook?