Living their best lives... Cigna popped 9%. UnitedHealth rose 5.5%. CVS (which owns Aetna) jumped 5%. Health insurance stocks have enjoyed the week after a couple key policy proposals — aimed at clarifying drug pricing so you can actually stop paying so much — were dropped or blocked.
Bipartisan-supported political issues do exist... Cutting prescription drug prices is one of them. One plan proposed by President Trump sought to end the practice of drug-makers giving discounts/rebates to middlemen representing health insurance firms that encouraged buying expensive drugs. That was dropped for political reasons. The other involved your TV.
- The problem: Drug companies interrupt your TV bingeing with overwhelming details on what their little pill can do, but are silent on the absurd price.
- The solution: The Trump administration pushed for a rule to require drugmakers to include the $$$ price next to that charming Cialis bathtub scene.
- The outcome: A federal judge said no, ruling that forcing a price tag violates the drug companies' rights to free speech.
Pricing is healthcare's secret muscle... Obscure, mysterious, unclear pricing. The reality for consumers is not knowing the price of prescription medicine — A doctor prescribes, a health insurer pays. There's bipartisan support to allow the invisible hand of economics to force some competition with visible prices. But healthcare stocks surged because drug prices will remain complex (and very high) for now.