Shares of pharmaceutical distributors and owners of pharmacy benefit managers are on the rise on Thursday following reports saying that the Trump administration has withdrawn its proposal to eliminate rebates from government drug plans. Commenting on the news, Raymond James analyst Chris Meekins called the decision "a win" for PBMs and distributors and "a slight negative" for the pharmaceutical makers.

PROPOSAL TO END DRUG REBATES WITHDRAWN: The Trump administration has withdrawn its proposal to eliminate rebates from government drug plans, a White House spokesperson confirmed to Politico, Dan Diamond and Adam Cancryn report. Spokesperson Judd Deere said in a statement, "Based on careful analysis and thorough consideration, the President has decided to withdraw the rebate rule. The Trump administration is encouraged by continuing bipartisan conversations about legislation to reduce outrageous drug costs imposed on the American people, and President Trump will consider using any and all tools to ensure that prescription drug costs will continue to decline." Publicly traded pharmaceutical distributors include McKesson (MCK), Cardinal Health (CAH), Amerisource (ABC) and Patterson (PDCO). Owners of pharmacy benefit managers include CVS Health (CVS), UnitedHealth (UNH), Anthem (ANTM) and Cigna (CI).

'A WIN' FOR PBMS, DISTRIBUTORS: After multiple media outlets, including Politico, reported that the Trump Administration has decided to withdraw the drug rebate rule, Raymond James' Meekins called the news "a win" for pharmacy benefit managers and drug distributors and "a slight negative" for the pharmaceutical makers. The cost of the proposal to the government was ultimately too high with little guarantee that list prices would go down, the analyst contended. However, President Trump hinted something "major" on drug pricing was coming over the next week during his kidney care speech and the analyst thinks the President is planning to move forward with an executive order on pricing. Publicly traded large cap drugmakers include AstraZeneca (AZN), Bristol-Myers (BMY), Eli Lilly (LLY), GlaxoSmithKline (GSK), Johnson & Johnson (JNJ), Merck (MRK), Novartis (NVS), Pfizer (PFE), Roche (RHHBY) and Sanofi (SNY).

PRICE ACTION: In morning trading, shares of CVS have jumped almost 7% to $59.06, Cigna has gained over 12% to $179.85, UnitedHealth has advanced about 5% to $259.33, and Anthem is up 4% to $299.20.

“Trump Effect” is The Fly’s recurring series of exclusive stories that highlights stocks that are being impacted, or are predicted to be impacted, by the comments, actions and policies of President Trump and his administration.