As the move to impeach President Donald Trump moves forward, one analyst contends that the proceedings could essentially bring Congress to even more of a screeching halt, notably on a bill that would curb some drug prices from pharmaceutical companies.
House Speaker Nancy Pelosi formally announced Tuesday that the House will begin an impeachment inquiry into whistleblower charges that Trump tried to pressure Ukraine’s president into investigating presidential contender Joe Biden and his son. That announcement came less than a week after Pelosi and other top Democrats unveiled a proposal that would allow the government to negotiate with drugmakers on the prices of at least 25 of the most expensive drugs in Medicare and the private market in an attempt to lower prescription-drug prices.
See also: Why Trump impeachment threat is rattling stock-market investors
With an impeachment moving through the House, you can either kiss any and all legislation and cooperation goodbye, or Speaker Pelosi will try to move something through “to inoculate vulnerable House Democrats from the ‘Do Nothing’ talking-point,” Cowen analyst Chris Kruger wrote in a note Tuesday.
Two prime examples could be the U.S.-Mexico-Canada Agreement for North American trade or a drug pricing bill that could get presidential support. Either of those options, however, do not seem very likely with an impeachment moving forward.
“When an administration and a chamber of Congress are at war; rarely does anything other than what is absolutely required get done,” Raymond James health care policy analyst Chris Meekins wrote in a Monday morning note that predicted that the whistleblower news would lead to a battle between Trump and congressional Democrats. “That means anything that is not on a firm deadline (like government funding), is unlikely to get done (think drug pricing).”
Health care stocks have been living under a looming cloud since the election, given Trump’s stated desire to lower drug prices in the U.S. For the year to date, health care has been the worst-performing sector on the S&P 500 index SPX, -0.84%, with both the sector and the Health Care Select Sector SPDR ETF XLV, -0.92% rising only 4.9%, compared with the S&P 500’s 18.3% gain.
Only four of the 63 components of the Health Care Select Sector SPDR ETF gained in Tuesday trading, as stocks were hit with concerns about an impeachment investigation. Only two, Intuitive Surgical Inc. ISRG, +2.56% and Dentsply Sirona Inc. XRAY, +1.45% , increased more than 0.1% in the session.
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