With Republicans sweeping the White House and both chambers of Congress last month, the life sciences industry could be due for some changes in key areas over the coming years, one analyst group contends.
While healthcare was not a major campaign issue in the most recent U.S. election, President-elect Donald Trump, empowered by his party's performance, has "significant ability to potentially influence U.S. health care" over the next two years, analysts at S&P Global wrote in a report Monday.
Overall for the U.S. healthcare industry, the analysts highlighted five main areas of concern that could witness a shift under Trump: developments related to the Affordable Care Act'\]
']\/203., Medicare drug price negotiations tied to the Inflation Reduction Act (IRA), the Federal Trade Commission’s (FTC's) approach to pharma M&A, tariffs and the priorities of the new head of the Department of Health and Human Services (HHS).
For the biopharma industry specifically, the IRA will be a key topic to watch. Trump has threatened to roll back parts of the legislation, but he could consider accelerating or expanding its Medicare price negotiations, according to S&P's analysts, citing "bi-partisan support for lowering drug spending and his earlier expressed support for Medicare drug pricing negotiation."
The FTC, meanwhile, is expected to adopt a more positive outlook on mergers and acquisitions under a “business friendly Administration,” which would benefit both the pharmaceutical and healthcare services industries, the analysts said.
Elsewhere, potential tariffs on medical supplies from China and other countries are likely to raise costs for healthcare service providers at a time when they are already grappling with inflation and increased labor expenses, according to the report.
Aside from the U.S.’s reliance on foreign suppliers for medical provisions like gloves, face masks and syringes, the country is also heavily dependent on outside sources for active pharmaceutical ingredients and finished drugs, especially from China and India, S&P added.
With that in mind, the analysts speculated that the second Trump administration is “unlikely to impose hefty tariffs on pharmaceutical imports, especially given the end goal of lowering U.S. drug costs.”
Finally, Robert F. Kennedy Jr., who Trump nominated to become chief of the HHS, could cause “major ramifications for the regulatory agencies” underneath the U.S. health authority, should RFK Jr. get the job, S&P said. The analysts cited Kennedy’s reputation as a “vaccine opponent,” arguing he could “slow down the processes by which new vaccines are approved.”
S&P issued its report in the wake of a slew of healthcare nominations by Trump. Over the course of the last several weeks, Trump has put forward RFK Jr. to head up HHS plus Johns Hopkins surgeon Martin Makary, M.D., for FDA commissioner and Stanford professor and physician Jay Battacharya, M.D., Ph.D., for director of the National Institutes of Health.
Despite concerns over some of those picks’ historic bristliness at federal health policies, especially surrounding the handling of the COVID-19 pandemic, Baird’s biotech specialist Mike Perrone recently opined that the “status quo in healthcare is likely to persist for some time” under the incoming administration.
That said, Trump’s nomination of RFK Jr. has drawn particular concern, with former FDA Commissioner Scott Gottlieb, M.D., recently arguing that the potential HHS leader's stated intentions around vaccines—if followed—could “cost lives in this country.”