After the long election cycle America has finally named its next Commander in Chief—Donald J. Trump. Many industries are anxiously waiting to see how campaign promises will turn into administration policies. For the pharmaceutical industry the post-election aftermath has been promising, despite Trump backtracking on campaign stances and vaguely outlining his policy as it relates to the industry.
Review of Campaign Stances
Looking at the promises made during the 18-month campaign, there are several initiatives that would seemingly work against the pharmaceutical industry. An important point to remember is that what is promised on the campaign trail does not always come to yield once in office.
Trump noted his support of allowing Medicare to negotiate drug prices, sell health insurance across state lines, and increase importation of drugs from other countries—measures are unpopular with the industry. Not to mention, repealing the Affordable Care Act could have unknown consequences on the pharmaceutical industry.
One of Trump’s overarching themes during his campaign was the cleanup of Washington D.C., or as he called it “draining the swamp,” through anti-lobbyist measures centered around setting new limitations on former officials from lobbying. In theory, these measure should be aimed at pharmaceutical lobbyists, as the pharmaceutical and health industries have outspent all other industries since 1998. Moreover, Trump received virtually no campaign funding from pharmaceutical lobbyists.
Stock Market Jump
Other parts of the healthcare industry have suffered in the stock market post-election—hospital stocks were down, health insurers’ stock prices were mixed—pharmaceutical and biotech stocks, however, performed remarkably well in the days following the election.
This industry sigh of relief comes after the public backlash following the Daraprim and EpiPen pricing scandals, as well as opponent Hillary Clinton’s pledge to crack down on prescription drug price gouging. Her 2015 tweet infamously sent Nasdaq Biotechnology Index down by 4.7%.
Price gouging like this in the specialty drug market is outrageous. Tomorrow I'll lay out a plan to take it on. -H https://t.co/9Z0Aw7aI6h
— Hillary Clinton (@HillaryClinton) September 21, 2015
With Executive and Legislative branches now held by the Republican party, it appears investors have concluded that Trump’s presidency will not threaten action on drug pricing. Shares of the Nasdaq Biotech Index and the S&P Biotech saw jumps of 9% on Wednesday, November 9, and continued to rise by 1.6% and 3.1% respectively in the days following. Major pharmaceutical manufacturers also saw positive numbers—Roche, Novartis, Sanofi, AstraZeneca, and GSK each rose between 2 and 4.5%. The bigger winner was Pfizer, up an impressive 8%.
Trump’s recent update to his website’s Healthcare platform focuses primarily on the repeal of the Affordable Care Act and creation of a more dynamic health insurance market, but one statement has some believing his administration will prove to have positive impact on the pharmaceutical industry:
“Reform the Food and Drug Administration, to put greater focus on the need of patients for new and innovative medical products.”
His plan for the first 100 days in office sheds slightly more detail: “Reforms will also include cutting the red tape at the FDA: there are over 4,000 drugs awaiting approval, and we especially want to speed the approval of life-saving medications.”
The concept of faster approval of medicines and devices has been popular on both sides of the aisle. For the drug industry this would result in a streamlined drug-approval process, which manufacturers have complained can be burdensome and hinders competition.
While the platform statements seem relatively benign and reinforces the patient-centric movement in the healthcare industry, critics also warn against the easing of FDA regulations. Washington Post journalist Carolyn Johnson writes that such efforts can erode standards that are in place to protect patients from drugs that do not work and might even be harmful. Robert Weissman, of consumer watchdog Public Citizen, explains “The language … is industry code for deregulation and reducing of safety standards…Of course, the general deregulatory rhetoric from Trump is a worry for us, but as applied to FDA, it would be very troubling.”
Glimpse into the Trump Administration
As of publication date, Health and Human Services Secretary has yet to be appointed, but Andrew Bremberg, current advisor to Senate Majority Leader Mitch McConnell and former Health and Human Services employee, is in charge of the healthcare transition team. The secretary will be expected to lead the charge in repealing and replacing the Affordable Care Act, deregulating the FDA, and run Medicare and Medicaid, among other responsibilities. Whomever is chosen will be key in setting the course.
Despite Trump’s lack of acceptance of pharmaceutical money and aim to curb lobbyist interactions, his transition team is already packed with those from “the swamp” from multiple industries, indicating that what was promised in the campaign may not come to fruition in his administration.
Even with Trump’s remarks against lobbyists it does not seem to deter those in the pharmaceutical lobby. Steve Ubl, CEO of Pharmaceutical Research and Manufacturers of America, said the lobbying group looks forward to the next Congress and Trump administration: “We are in a new era of medicine with treatments and cures that are completely transforming the fight against debilitating diseases. To ensure this innovation continues, we need to modernize the FDA to keep pace with scientific advances, remove regulatory barriers that make it harder to move to a value-driven healthcare system and focus on making better use of the medicines we have today.”
As it stands now the pharmaceutical industry can look forward to two main benefits from the Trump Administration; a lessened focus on drug pricing and a laxer FDA. But as history has already proven, just because Trump promised it in the campaign does not mean it is uncompromisable. After all, it is his eccentric and unpredictable nature that drew so many of his supporters.
To speak further about changing regulations and how they might impact your business contact me at LSchultheis@Tefen.com.
Leah Schultheis, Tefen USA ConsultantFDA, Life Science, Lobbying, Pharma, Trump