On Tuesday night, millions of Americans watched as former president Donald J. Trump gathered up enough electoral votes needed to win the U.S. presidential election over challenger and Vice President Kamala Harris. The outcome ushers in a new era of Republican leadership following President Biden’s four-year term that saw major changes within drug policy including the historic Inflation Reduction Act.
But how will Trump’s second White House reign fare for the biopharma industry? It’s a question that remains to be seen.
The president-elect’s “concepts of a plan” regarding healthcare haven’t been laid out yet, but he has a few options on the table. There’s a chance he could move to revive his Most Favored Nation drug pricing policy that died out quickly after attracting lawsuits, or he could look to Project 2025, a controversial 922-page policy proposal (PDF) by The Heritage Foundation, for a few ideas.
If he were to turn to Project 2025, attempts to repeal the IRA could be in motion, but after speaking with key opinion leader John Brooks, analysts at Jefferies consider that unlikely. In fact, healthcare policy in general would likely “rank lower” on Trump’s legislative agenda compared to his first term, with legislative changes possibly coming to the insurance and Medicare Advantage vein at most.
An equally important question may be not what he will do but how he will do it.
“How much does [a Trump administration] learn from its past mistakes?” John Barkett, managing director of BRG’s healthcare transactions and strategy practice, mused on a recent episode of Fierce’s "The Top Line" podcast. After all, the president-elect’s Most Favored Nation policy was ultimately thrown out because “he had not gone through the proper rulemaking process,” Barkett said.
Looking further into his first term, the then-president was tough on pharmacy benefit managers (PBMs) and has looked to drive down drug prices from the get-go. In fact, his “momentum” on the drug pricing issue carried over into the Biden administration and played a part in the IRA, Barkett said on the podcast.
It should be noted that the Senate and the House are now also controlled by a Republican majority. During the IRA’s passage, not a single Republican voted in favor of the bill, which has largely been criticized by pharma industry leaders for its potential to quell innovation in drug development.
As for the industry’s initial reactions on the innovation front, the Pharmaceutical Research and Manufacturers of America (PhRMA) wants to “work with his administration to further strengthen our innovation ecosystem that enables the United States to lead the world in medicine development,” CEO Stephen Ubl said in a statement. “New medicines are transforming our ability to prevent, treat, and cure deadly disease, improving patient lives and helping to avoid the most expensive parts of our health care system.”
Ubl also congratulated Trump on the win and noted that PhRMA “look[s] forward to working with him to build on the successes from his first administration.”
“We are committed to working with the Trump administration and the new Congress to make our health care system work better for patients while preserving our unique ecosystem that enables greater innovation and lower costs for patients,” Ubl said.
Of course, a recent twist in Trump’s later campaign days was the introduction of Robert F. Kennedy Jr. as a prospect to head up healthcare. Kennedy, who scrapped his own campaign for the presidency in August, is widely known for his anti-vaccine rhetoric and conspiracies and was even temporarily banned from Instagram in 2021 for spreading misinformation about COVID-19 vaccines. At a rally in New York, Trump pledged to, if elected, allow Kennedy to “go wild on health” as well as “the medicines.”
Kennedy later delivered a grim message to the FDA on X, formerly Twitter, warning those who “work for the FDA and are part of this corrupt system” to “1. Preserve your records, and 2. Pack your bags.”
Putting aside the Kennedy of it all, analysts at BMO Capital Markets call the election results a “modest positive” for the biopharmaceutical sector, BMO’s Evan Seigerman wrote in a Tuesday night note to clients. The IRA likely won’t be expanded as Harris would likely have attempted to and may even be deprioritized in terms of funding considerations. FTC intervention will likely be lower overall and corporate taxes will stay lower or only marginally higher, Seigerman noted. Leerink analysts agree that a Republican-led FTC head would be “more flexible” in regards to biopharma industry M&A.
As for specific drug reform proposals, it’s important to note that elected Republican legislators have “different views” on drug pricing, meaning “proposed reforms would likely not be passed,” Jefferies analysts pointed it out.
Kennedy’s potential role in health regulation, however, makes for a “significant negative” and “the biggest X factor” for the industry, Seigerman added, although it remains to be seen who actually ends up running key health agencies.
“We need to see who Trump advances into key power positions,” Leerink analysts noted. Kennedy previously said that Trump “promised” him control of the Department of Health and Human Services and its sub-agencies including the CDC and the FDA.
At Wednesday’s Financial Times (FT) Global Pharma and Biotech Summit in London, GSK’s CEO Emma Walmsley agreed, noting “let’s see what happens in terms of who is appointed into what kind of role in the administration,” Pharmaceutical Technology reported. GSK is based in England, but is “heavily invested” in the U.S., Walmsley explained. “It is by far the most important market to bring our innovation to first.”
Kennedy champions a “make America healthy again” mantra, referring to a broad, transformative set of ideas. Walmsley agrees with the general sentiment, but points to declining vaccination rates as a major area of concern, conflicting with Kennedy’s anti-vaccine stance.
“Number one is transparent, adult-to-adult communication around the facts. Of course, vaccines are a much sharper question, because you’re dealing with injecting healthy people—often babies. Parents have questions,” Walmsley said. “You don’t just shout, trust us. You bring the facts forward, and I hope that science and truth will prevail."
Kennedy told NPR on Wednesday that the strategy for his leadership has “not yet been decided,” but a Senate-appointed spot in the government is a “possibility.” He further outlined three “instructions” given to him by Trump, which are to erase the “corruption and conflict” out of regulatory agencies and return them to the “gold-standard” along with ending the “chronic disease epidemic.” On the last point, Trump is looking for “measurable impacts” within two years, Kennedy added.