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2016 US Elections Fearful or Fertile Ground for Pharma?

Posted on November 10th, 2016 by in Pharma R&D


The elections outcome, the morning after, which is so fresh in everyone’s mind that we need to see how a Trump Presidency will shape the future growth of the US economy and in turn ultimately allow growth in innovation in Pharma Industry. No one expected the election’s outcome, including Donald Trump and his running mate. Everyone got a big surprise watching states like Florida, Pennsylvania, Wisconsin; North Carolina went into the ‘Red Column’ for the Trump-Pence ticket. It was a long night and as the election results were getting clear around 3 A.M. or so, the Dow and S & P futures were down over 5%. It was the ‘fear of unknown’ and untested territory that was causing the negative shift in the Futures markets. However, as the morning rose, there were Trump’s acceptance and Hillary’s concession speeches. Since then, we got to see the ‘tone’ of ‘uniting the country’, which had gone so ‘divisive’ in the last 6 months of campaigning. The talk of President-elect Trump, who said that he will work towards unity and also towards free trade, the markets reacted positively. California’s Prop 61 indicated that the voters have rejected the plans to lower drug prices.

Trump’s proclamation of bringing jobs to the US shows that the Pharma industry will participate in that and the innovation will flourish here in the US, giving boost to local R & D centers. Having more tax benefits to the Corporations in general, there will be more possibility of ‘turning the corners on bringing back companies who had plans of leaving the US for tax reasons.

It had also been said that the democratic government administration may be in favor of allowing Medicare/CMS to negotiate drug price contracts. However, in my opinion, it would be harder now to achieve given the current situation with a Republican White House, GOP majority in the Senate as well as in the congress. The positives from the new administration would be that the Republican administration would not be going for a broader plan to lower the cost of drug or device prices. Pfizer’s CEO, Ian Read had said this in September 2016, when he spoke at the Wells Fargo Health Care Conference that ‘Price Controls would be very negative for Pharma innovation.’

According to Ben Adam’s freshly published report in FierceBiotech column* published on November 9th, he writes that “ This support could also prove influential on the 21st Century Cures Act, which would clear some new, faster pathways for drug development–and is unsurprisingly backed by the industry. The bill’s aim is to involve patients more than ever before, notably their medical experiences, which includes gathering patient data and leaning more on the burden of disease. He further continues that the biggest financial implication is the several billion extra dollars earmarked to be pumped into the NIH and clinical research, with the bill promising an additional $2 billion per year for five years to create an “NIH Innovation Fund” and $550 million also coming in added funding to the FDA over the same period. This funding has however irked some Republicans who dislike high government expenditure” according to Ben Adams, in his review.

All in all, I, however, see quite a few positives for the Pharma Industry in general under the new administration. It furthers my belief that with the introduction of new trade bill, there would be a newly created appetite for bringing jobs which had gone overseas, back to the US. This will create jobs in innovation or in R & D sector, more than in the manufacturing sector. CMOs and CDMOs would also thrive as there are many small to mid-size Biotech companies, which would thrive with all the tax benefits and incentives that the new administration would offer.

Here is my positive twist to this topic that I clearly see in the forthcoming years. Due to a rapid emergence of many smaller and midsize  biotech companies, who tend to discover new molecules and take those through Pre-Clinical development, through IND and with more infusion of funds, can take those through Phase I & Phase IIA/ B, can provide a good substrate for Pharma companies to license in these compounds, if the ‘Proof of Concept (POC) looks favorable for being a ‘best in class’ or ‘first in class’ drug or a biologic. The new Republican controlled Congress/ Senate and the White House, should be a ‘fertile ground’ for innovative Pharma/Biotech companies!


All opinions shared in this post are the author’s own.

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