瑞信美股医疗保健行业管理式医疗华盛顿的医疗形势正在再次发生变化201971225页

DISCLOSUREAPPENDIXATTHEBACKOFTHISREPORTCONTAINSIMPORTANTDISCLOSURES,ANALYSTCERTIFICATIONS,LEGALENTITYDISCLOSUREANDTHESTATUSOFNON-USANALYSTS.USDisclosure:CreditSuissedoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Asaresult,investorsshouldbeawarethattheFirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.12July2019Americas/UnitedStatesEquityResearchManagedCareMa[e-mail]@[e-mail],[e-mail]eisShiftingAgainforHealthcare–PositivelyforMCOs■OnJuly11th,wehostedaconferencecallwithEthanSiegel,FounderandPolicyAnalystatTheWashingtonExchange.ThecallwasdesignedtodiscusstheTrumpAdministration’sdecisiontonotmoveforwardwithitsMedicarePartDrebaterule.WealsodiscussedotherkeypolicydebatesthatarepercolatinginCongressorwithintheAdministration.Aneditedtranscriptofthecallisincluded.■OntheDrugPricingDebate,FocusisSeenShiftingAwayfromPBMs/HealthPlans.Mr.SiegelseesthedecisiontodroptheMedicarePartDrebateruleinitiativeasaclearpositiveforPBMsandHealthPlans.HeseestheAdministrationgoingforwardfocusingondrugimportationandtheInternationalPriceIndexproposalforPartBdrugs.TheseinitiativesareseenasmorelikelytoresonatewithvotersandbemoreeasilydescribedbythePresidentonthecampaigntrail.Actualsubstantivechangesineitheroftheseareasareseenasonlyoccurringverygradually.■CongressionalActiononSurpriseBillingandOut-of-PocketPartDCostsPossible.Mr.SiegelseessubstantialbipartisaninterestinaddressingissuesaroundSurpriseBillingandOutofPocketMedicarePartDcosts.However,whethereithersideoftheaisleiswillingtoultimatelyseetheothersidehaveavictoryorthePresidentbeabletoclaimsuccessaheadofnextyear’selectionmakesitfarfromcertainthatlegislationwill,infact,passthisyear.Themostlikelyvehiclethatthesepiecesoflegislationgetattachedtoisadebtceilingorgovernmentfunding/appropriationsbill.Mr.SiegelreportsthatthereissomeinterestinconsideringpointofsalerebatesintheSenatebutthattheHousehasshownalmostnointerestinrebates,ratherfavoringdirectgovernmentpricenegotiations.■WebelievetheMacroBackdropisClarifyingSubstantiallyforMCOs.OutperformratednamesareANTM,UNH,CI,andHUM.12July2019ManagedCare2ConferenceCallRecapWehostedaninvestorcallwithEthanSiegelonJuly11,2019,todiscusstheTrumpAdministration’sdecisionnottomoveforwardwithitsMedicarePartDrebaterule.WealsodiscussedthestateofplaywithhealthpolicydebatesintheAdministrationandinCongress.Thefollowingtextisaneditedtranscriptofthatcall.AJRice:Welcomeeveryonetoourcall.Iappreciateyoudialingin.I’mthehealthcareservicesanalyst,managedcare,andfacilitiesanalystatCreditSuisse.I’mjoinedonthecallbyEvanSeigerman,ourlargecapbiotechanalyst,aswellas,ofcourse,ourprincipalspeakerEthanSiegel.Ethan,asmanyofyouknowisthefounderoftheWashingtonExchange.He’sanotedWashingtonpolicyanalyst,widelyquotedinbusinessmedia.Heisanexpertnotonlyonhealthpolicybutotherareas.HefoundedtheWashingtonExchangein1995butbeforethatwasadomesticpolicyanalystatPrudentialwherehisteamwasrecognizedbyInstitutionalInvestorasthetopteamonWashingtonpolicy.We’vegonetoEthanoftenwhenthelandscapeischanginginWashington,andhe’sveryknowledgeableaboutawidevarietyofareasrelatedtohealthcarepolicy.Obviouslytheeventthatpromptedustodoacallthisafternoonistheannouncement,Iguess,latelastnightthattheTrumpAdministrationhaddecidedtopullitsdrugrebaterulerelatedtoMedicarePartDthat’sbeensittingattheOfficeofManagement&Budget(OMB).SoEthan,we’vegotanumberofindividualquestions,andI’msureouraudiencehassome,butcanyougiveusalittlebackgroundastowhatyouthinkhappenedhere.Howdidwegofromthisbeingahighpriority,withalotofairtime,tothepointwheretheAdministrationisdecidingtopullitlastnight?Istheproposalcompletelydeadorisitjustsomethingthatmightcomebackatsomepointinthefuture?EthanSiegel:ThankyouAJ.Andgoodafternoontoeverybodyonthecall.ThejumpingoffpointisthefactthatearlythismorningTrumpAdministrationspokespeopleletanumberoftheircontactsknowthattheyweregoingtowithdrawthedrugrebateSafeHarborfinalrulethatwassittingattheOfficeofManagementandBudget.IthinkgoingforwardthisisapositiveforthePBMandMCOsectorsandanegativeforpharma,whichhaslobbiedheavilytohavethisimplemented.ThemoveputsthebullseyebackonthebiopharmasectorbecausethemajorTrumpadministrationregulationthat’sstillsittingoutthereistheIPIPartBdrugmodel.12July2019ManagedCare3ButIthinkthere’ssomemacrodynamicsgoingonherewithregardtopharmaandthepharmasupplyplayersandit’sthis;PresidentTrumpcampaignedin2016ontwosignaturedrugissues:1)directMedicarePartDnegotiations;and2)drugimportation.HegotturnedaroundonthatbyhisHealthandHumanServicesSecretary,AlexAzar,whoarguedthatthosereallyweren’ttherightwaystogoandinsteadtheyshoulddosomethingmoresystemictogoaftertheproblemofhighdruglistpricesandtheprofitsbeingmadeinthepharmasupplychain.TrumpwentalongwithhisSecreta