With less government funding, it is worth questioning the long-term sustainability of the pharmaceutical industry’s response to the election. The post-election surge appears to have been driven by the expectation of a laissez faire attitude towards drug pricing from President Trump, in contrast to the fear of potential price controls to combat “over-pricing” of high cost-drugs under a Clinton presidency. But the prognosis is not all rosy for Pharma. The industry had negotiated to be largely left alone under the ACA, but in an environment of much more restricted government funding, it would not be a surprise to see President Trump enable Medicare to negotiate prices for high-cost, low-competition drugs. Biotech ventures driving towards the promise of precision medicine tapping into the human genome may wish to consider the size of the market in the new environment. Similarly, Trump’s populist bent is likely to put pressure on drug pricing by increasing competition, such as reducing the FDA biologic exclusivity period (from its current 12 years), directing the FDA to give prioritized, expedited review to biosimilar applications with limited competition in the marketplace, and accelerating the approval process for generics and other drugs drug applications. For biotechs, the tradeoff may be an easier FDA process, but a tougher reimbursement environment.

President Trump and the Future of US Healthcare Regulation & Reimbursement

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