Is it about to win? Goldman Sachs 340b and Medicaid – Abbvie (NYSE: Abbv), Bristol -Myers Squibb (Nyse: BMY)

Medicaid financing, which reached a group of about $ 900 billion annually, serves about 72 million participants, and the 340B program is major concentration areas for possible health care reforms.

Goldman Sachs analyst Salveen RichterHowever, it warns that federal medical cuts may lead to strict policies and low drug coverage.

For every Reichter, the 340B program currently faces increased audit, with proposed repairs that can benefit biological pharmaceutical companies by reducing the eligibility of drug discounts, which will enable “profit transfer” from service providers to Biopharma.

This transformation can positively affect the main biological pharmaceutical companies with high exposure to 340b drugs, such as Merck & Company, Inc. Mrkand Gilead Sciences, Inc. doctrine and Bristol Maires Square Bi.

However, the details of these reforms are still unconfirmed, which can cause “volatility” in the health care sector until more details are issued.

At the same time, the financing of Medicaid and eligibility changes are considered as possible measures to save costs by the new administration.

Also read: ABBVIE jumps after the fourth quarter profits, Skyrizi and Rinvoq Boom Offions Humira Dreamline

These changes can have negative effects on biical pharmaceutical companies with a large exposure to medical medicines, including Abbvie Inc. ABBVAnd Gilead Sciences and Elie Lily and Partners ToWhich is a large medicaid drugs a large percentage of its sales in the United States.

In general, for the 340B program, the analyst sees potential results of policy/legal that will transfer dynamics towards transferring profits from service providers to biological pharmaceutical companies as positive in a large part of the biological drug sector.

Meanwhile, the potential Medicaid changes can create “potential opposite winds” for healthcare providers and biological pharmaceutical companies, although accurate effects are still unconfirmed.

The healthcare industry awaits more clarity on these changes in the proposed policy and its effects.

In general, the analyst notes that exposure to medical aid and 340b can vary widely depending on the product and signal.

The three most important drugs with the field in the field of Medicaid (starting in 2022) are Abbvie Humira, Gilead’s Biktarvy, and ELI Lilly’s Troical for Type 2 Diabets and cardiovascular disease.

For these drugs, the Medicaid and 340B spending represents about 15-30 % of the FY22 and FY23 drug revenues.

Moreover, the 340B effect may vary from different ways of management within the same indicator – for example, Gilead expects 340B exposure to injection injection for Prep compared to daily mouth – and expanding eligibility for 340B discounts may have a significant impact on certain treatments on others.

In general, the repair will be 340B as the back wind of biofuels, because the above initiatives generally aim to reduce access to the legal discount.

On the other hand, discounts on spending on medicaid can have a negative impact on the size if it has an effect of reducing coverage, as the analyst writes.

Read after that: