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Drug Stocks Surge After U.S. Says Cost Panel Will Wait Until 2017

  • Projected trigger of ‘IPAB’ is on same schedule as last year
  • Medicare fund shortfall is predicted two years earlier
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The Hidden Cost of Cheaper Drug Prices

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Drug and biotechnology stocks surged Wednesday after the U.S. government said a cost-cutting mechanism created under Obamacare, known as the Independent Payment Advisory Board, or IPAB, will likely be triggered in 2017, not this year as some investors had feared.

The 2017 projection is in line with estimates from last year by Medicare’s Board of Trustees, which on Wednesday released its annual report on the U.S. health-care program’s long-term finances. The trustees also said that Medicare’s hospital insurance trust fund, which finances some care under the program, will be unable to meet all of its obligations in 2028, two years earlier than projected.