Quick reads

From Obamacare to Trumpcare: Implications for healthtech innovation

Buckle up. The Trump administration has just begun, yet it is already shaking up the healthcare industry and sending shockwaves across our country. The ACA repeal process has officially begun in Congress, and it promises to be a bumpy road ahead. President Trump’s recent “pharma companies are getting away with murder” comment brought big pharma to their knees and caused healthcare stock to drop to their lowest levels since October. The question we get asked most frequently in the venture community is how Trumpcare will affect the healthcare innovation economy?

To attempting to answer this question, let’s start by noting that we don’t have a crystal ball and this is largely speculation. For the time being, we’ve seen investors take a “wait and see” approach before committing any significant capital into the space. This may or may not signify a dramatic turn from the gold rush of investment into healthtech we have grown accustomed to the past five years. Look to healthtech financing numbers from Q1 2017 as an indicator of a possible slow-down in the market. 

Given that a slowdown may be on the horizon, industry experts have advised entrepreneurs to conserve cash as best they can and cut down on the massive monthly burn rates based on slim hopes of radical growth. Additionally, if decent financing opportunities present themselves, entrepreneurs are encouraging to take it while they can. 

Gloomy short-term predictions aside, we at WeFund Health will remain active in the healthtech investing space. Innovation and entrepreneurship cannot be constrained, and if history is an indicator, great healthcare companies can be launched in reaction to policy changes. Subsequent to the disruption caused by Trumpcare, expect the healthcare capital markets to experience a period of chaotic activity, followed by a realignment and the development of a new order, governed by the desire for efficiency. You can bet that hundreds of healthtech entrepreneurs are already looking to capitalize on the situation.

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