The State of U.S. Healthcare Laws Has a Low Impact on Australian Healthcare Stock Valuations

Despite many Australian-listed healthcare stocks we cover having substantial revenue exposure to the U.S., the latest potential regulatory changes in that market pose a low risk to our fair value estimates. The cost of and access to healthcare is an emotive topic among U.S. voters and hence at the forefront of political agendas. Of relevance to the Australian companies that operate in the U.S. is the draft Lower Health Care Costs Act, or LHCCA, which aims to improve transparency in the healthcare sector and reduce prescription drug pricing, as well as President Donald Trump’s recent executive order on transparency and comments on capping drug prices to the lowest developed-country level.