With people in the United States and beyond awaiting the election results, it’s not just the presidential race that could affect the pharmaceutical industry. Control of the Senate will also play an important role, and numerous other factors remain up in the air as the votes come in.
To dissect all the potential outcomes, analysts with SVB Leerink hosted a call Monday with two policy experts who said Democratic nominee Joe Biden is favored in his race, and say it’s “more likely than not” Democrats will capture the Senate, analyst Goeffrey Porges wrote in a note to clients.
The Senate outcome, regardless of the presidential result, will determine the level of drug-pricing action, the experts said. The “fate of international reference pricing, inflation caps, and rebate reform probably hinges on election outcomes in the Senate, regardless of who wins the presidency,” Porges wrote.
If Republicans keep the Senate, the experts believe “any proposed reforms are likely to be blocked by majority leader Mitch McConnell,” Porges added. Even if Democrats win the chamber, major changes to drug pricing will “depend on whether Democrats move to reform or outright eliminate the filibuster,” he added. The experts don’t see drug pricing as a strictly party-line issue, either.
Regardless of the election results, the experts see the biopharma industry as willing to compromise on certain reforms—such as limits to price increases based on inflation and changes to the patent system—to “protect launch prices,” Porges wrote.
Drugmakers’ power to set prices on new products is “paramount to continued investment in biopharma innovation and maintaining the viability of the industry,” Porges wrote. Biden has proposed an independent panel to recommend launch prices, but even if he wins, he might face challenges bringing that idea to fruition, one expert said.
And no matter who wins, the experts see pharmacy benefit managers as a shared target moving forward. If Biden wins, they’ll be watching closely for his selection of HHS secretary because the pick could send signals about his goals in healthcare and drug pricing.
But while drug pricing is a frequent talking point in Washington, the experts see COVID-19 as the primary issue right now. They believe it’s in both parties’ best interest “to prioritize vaccine development and distribution and continue the strong collaboration with the biopharma industry on this front,” Porges wrote.
“Thus, even in the case of a Democratic victory in both the White House and the Senate, drug pricing reform will be a secondary priority after COVID,” the analyst added.