Surging health careOpens a New Window. stocksOpens a New Window. lifted the Dow Jones Industrial AverageOpens a New Window. on Thursday above 27,000 for the first time as the White HouseOpens a New Window. backtracked on a proposed rule to eliminate rebates that flow from drugmakersOpens a New Window. to middleman pharmacy benefit managers. The S&P 500 also closed at a record high.
The proposed ruleOpens a New Window., which was projected to raise federal spending by $177 billion over the next decade, was poised to prohibit drug rebates for treatments offered in the MedicareOpens a New Window. and Medicaid programs beginning in 2020.
It drew intense backlash from pharmacy benefit managers (PBM), whose operations would have been significantly curbed by the action, and praise from drug companies that routinely blast PBMs as profiting off of the arrangement.
Investor sentiment was also buoyed by optimism that the Federal Reserve will cut interest rates at their July 31 meeting.
Following several days of uneven trading activity over concerns that the Federal Reserve would withhold moving forward on the expected cuts, investors were optimistic after Powell’s remarks that the central bank’s outlook for the U.S. economy is weighed down by trade tensions.
Many Federal Open Markets Committee participants “saw that the case for a somewhat more accommodative monetary policy had strengthened," he said in prepared testimony for the House Financial Services Committee. Read more at FOX Business