Democratic presidential candidates (L-R) former tech executive Andrew Yang, South Bend, Indiana Mayor Pete Buttigieg, former Vice President Joe Biden, Sen. Bernie Sanders (I-VT), Sen. Kamala Harris (D-CA) and Sen. Kirsten Gillibrand (D-NY) take part in the second night of the first Democratic presidential debate on June 27, 2019 in Miami, Florida.
Drew Angerer | Getty Images
Skyrocketing prescription drug costs and health care continue to dominate both Democratic and Republican agendas, increasing uncertainty in the industry heading into the 2020 elections.
There are 11th-hour efforts in both the House and Senate to try win passage of bills to combat escalating drug prices and surprise medical billing before year-end. The House is expected to vote as early as Thursday on a sweeping plan to curb prescription drug prices. But the chances of a bill making it to the president's desk for signature seem slim.
If history is any guide, the odds of finding agreement on major legislation and regulations that don't get passed before the new year will fall off dramatically in 2020 — and not just because of the rancor over impeachment proceedings.
"In the last several elections, one thing that we've tracked is how much policy change happened in the year of election. What we found is, typically, the number of policy changes drops by half," said Gurpreet Singh, PwC partner and health services sector leader.
The PwC Health Research Institute found that major health-care reforms slowed significantly during the reelection bid of President George W. Bush in 2004 — the year after Congress passed Medicare legislation that ushered in Part D drug coverage for seniors. Reforms slowed again during President Barack Obama's reelection campaign in 2012, two years after the Affordable Care Act had been passed.
PwC says the presidential election poses the biggest uncertainty for health insurers and hospitals in 2020, due to the potential shifts in policies over the next four years.
If President Donald Trump is reelected, the researchers expect the administration will to continue its efforts to restructure the Medicaid program, the federal health program for the poor. The White House has stood behind Republican states that push work requirements for recipients, which could curb the growth of Medicaid enrollment. Medicaid expansion under Obamacare has been a growth driver for health insurers over the last decade.
If a Democrat wins the White House, the Trump administration's Medicaid measures would be off the table, including efforts to move to block grant funding for states.
PwC sees little chance of "Medicare for All" proposals, which would put private health insurers out of business, becoming law — even if a Democrat wins.
"That's overrated … it's not necessarily going to be something that is going to happen," said Singh, adding "we're not quite there yet."
For pharmaceutical firms, the Trump administration's tariffs on Chinese imports pose a risk if there's no resolution to the trade dispute with Beijing. PwC researchers note that tariffs on essential chemicals sourced in China already "have complicated supply chains for drug companies." The industry could continue to face uncertainty over trade no matter who wins the White House.
Tsunami of high prices
Regardless of the presidential election, high health-care costs will continue to be the top issue in the U.S. next year. With dozens of new lifesaving gene therapies in the pipeline for approval, PwC researchers say the next decade could bring a tsunami of high prices.
"We expect to go from … about four new drugs applications [this year] to about 200 in 2020. By its nature, that's going to increase costs" Singh said. "Those tend to be very costly million-dollar treatments."
Novartis' Zolgensma, one of the break-through therapies approved by the FDA this year to treat a rare muscular disorder in children, is priced at more than $2 million.
The FDA is expected to approve between 10 and 20 new drugs per year over the next decade. By 2030, gene therapies could target diseases that impact 500,000 people in the U.S. alone.
Health care was a top issue for voters in the 2018 midterm elections, which allowed the Democrats to regain control of the House.
The impact of eye-popping drug prices in an election year could play a big role at the ballot box in 2020.
More than 70% of voters surveyed by PwC in September said they will likely vote for a candidate based on his or her health-care policies.