Sanders Releases Pharma Pricing Plan, Housing Shortage Continues
July 31, 2017
Senator Bernie Sanders has released a plan meant to limit over-priced drugs. The debt ceiling also continues to approach, with the GOP debating how best to deal with it. The U.S. oil rig count is up again, along with housing prices, as the market continues to deal with a shortage of properties.
- GOP Congress to face debt ceiling debate. On Friday, U.S. Treasury Secretary Steven Mnuchin released a statement to congress saying that the federal borrowing limit must be raised by September 29th or else there could be a risk of the government running out of money. The borrowing limit of nearly $20 trillion was reached in March. Since then, the Treasury Department has been relying on cash-conservation measures. When the government runs out of money to write Social Security checks or pay interest on debt, financial markets can experience turmoil. Mnuchin expressed that he does not plan on prioritizing payments; rather, the government should honor all of its obligations and raise the debt limit. This decision will also clash with the end of the fiscal year on September 30th and potential issues could arise if Congress does not authorize new spending for 2018. In addition, some lawmakers want to reduce spending caps established during the Obama Administration. While consequences are increasing, as stated by Mnuchin, the debt limit continues to be a complicated political dilemma. [WSJ]
- Sanders to unveil rule requiring drug companies to set fair prices. Sen. Bernie Sanders (I-Vt.) plans to unveil a new rule that forces pharmaceutical companies to set reasonable prices for drugs that are developed through federal research dollars. This new rule would be an amendment to the Federal Food, Drug, and Cosmetic Act and is the senator’s most recent attempt of thwarting pharmaceutical company Sanofi Pasteur from obtaining a license to create a vaccine for the Zika virus with the U.S. army. This move of pursuing a patent will block other companies from being able to produce and sell the vaccine at a lower price. Sanofi Pasteur has received $43 million from the Department of Health and Human Services and is expecting approximately $130 million more for future testing. Under Sanders’ new rule, federal agencies and nonprofits that receive federal funding would have to sign a reasonable pricing agreement before handing over exclusive rights to drugs or vaccines. [The Hill]
Economic Indicators & News
- U.S. oil-rig count up a third time this month. On Friday, Baker Hughes reported that the number of active U.S. rigs drilling for oil increased by 2 to 766 rigs for the week. The oil-rig count tallied a fall of 1 rig last week, after two consecutive weeks of gains. In addition, the total active U.S. rig count, including oil and natural-gas rigs, increased by 8 at 958. September West Texas Intermediate crude barely changed from the level it was traded at before the data was released. It was up a slim 63 cents at $49.67 a barrel. [Market Watch]
- U.S. previously owned home sales rise; limited by shortage of properties. After three consecutive months of decline, the number of contracts to buy previously owned U.S. homes was up in June. Nevertheless, the housing market still remains limited by a shortage of properties available for sale. The Pending Homes Sales Index, based on contracts signed last month, increased 1.5% which was more than double the expected increase of 0.7%. Economists speculate that the increase in pending sales in June suggests that home sales are likely to increase as well. However, the rebound still only undid a small portion of the decline in the last couple of months. The housing market is expected to recover over time despite recent weaknesses but homebuilders are still having trouble closing the housing inventory gap. [Reuters]