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How Pharma Will Be Impacted by Trump’s Healthcare Reform Plans

Posted on November 25th, 2016 by in Pharma R&D

How Pharma Will Be Impacted by Trump’s Healthcare Reform Plans

It has only been a couple of days since Donald Trump was elected President of the United States, but the pharmaceutical and biotech industries are already wondering what might be in store for them in 2017. After all, Trump has insisted that repealing and replacing the Affordable Care Act will be a top priority as soon as he takes office this coming January.

Pwc Health Research Institute has already put out a Spotlight report titled “President-elect Donald Trump: Turnaround time” which examines how his proposed healthcare reform agenda might affect different stakeholders (drug makers, insurers, providers, employers, etc.). The report also looks at how likely it is that he would be able to accomplish his goals. For the report, HRI spoke to healthcare advisors and association executives, and also surveyed consumers about policy issues.

During his presidential campaign, Donald Trump revealed a plan that was headlined by a promise to repeal and replace the Affordable Care Act (often simply called Obamacare) in the early days of his administration. Although details are scant on how he expects to accomplish that, the President-elect’s healthcare reform agenda also includes plans to increase transparency in pricing, encourage the use of health savings accounts (HSAs), and turning Medicaid into a block grants program. He also touts the idea of allowing insurers to sell coverage across state lines, which has often been a key reform suggested by Republicans.

The report notes that there are four main elements in these healthcare reform proposals that are most likely to affect the pharmaceutical and life science sectors, for better or for worse.

  1. Repealing and replacing the ACA. The upside of repeal and replace is that some ACA taxes that have been levied on pharma firms and device makers could be repealed, as well as requirements for Medicaid drug rebates. The significant downside, though, is that millions of people will lose their health insurance, and fewer people insured means less spending on pharmaceuticals.
  2. Renegotiating trade deals abroad. On the pro side, this could help American pharma companies, particularly if the renegotiated deals included longer patent exclusivity rights. It could also result in a stronger market for selling pharmaceuticals in other countries. On the con side, other nations could just pull out of trade agreements entirely, seriously complicating trade and making it costlier.
  3. Introducing drug re-importation legislation. HRI believes that this wouldn’t have much of an impact on pharma, especially if it was specifically giving consumers access to imported and dependable drugs from Canada. But the one possible issue would be that companies might have to worry about safety concerns with counterfeit drugs.
  4. Giving Medicare power to negotiate prices with drug makers. There might not be much significant effect to this since Part D plans are already negotiating with drug makers for discounts, but there is still some risk that negotiation could lead to price controls.

The report additionally points out that Trump’s apparent focus on a more retail-oriented style of healthcare could make it easier for new companies that are developing consumer-friendly applications to get into the market. Furthermore, if he reduces federal regulations as he has promised, that could make entry into heavily-regulated areas (e.g. medical devices, new therapeutics) easier. On the other hand, fewer regulations could negatively impact larger companies who will have to contend with more competition.

President-elect Trump’s inauguration is still a few months away, so it will be some time yet before we see if he is really going to pursue his intended healthcare reform goals. Some of his plans may indeed benefit the pharmaceutical industry, but currently we are in a period of uncertainty. Only time – and the often slow-moving machinations of Washington D.C. bureaucracy – will tell.


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

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