Harris vs. Trump: How will the presidential election impact biopharma?

With just a week left until the 2024 presidential election, the close race between Vice President Kamala Harris and former President Donald Trump is sparking much speculation about what a win by either candidate will ultimately mean for the biopharma industry.

While the political battle is still too short, analysts and stakeholders have weighed in on the high-profile biopharma issues – including drug pricing reform – that could play an important role in the new administration.

“A Trump win would be more positive for biopharma sentiment overall,” BMO Capital Markets analysts Evan Seigerman and Kostas Biliouris claimed in a recent note to investors.

Under a second Trump presidency, the market can be assured that the Inflation Reduction Act (IRA) will not be expanded – there is even speculation that it could even be repealed – and that the Federal Trade Commission (FTC) will shift its focus from Biopharmaceuticals and drug pricing reform are sought Pharmacy Benefit Manager (PBMs), according to Seigerman and Biliouris.

On the other hand, Harris argues in her economic plan that both PBMs and Big Pharma are responsible for inflated prescription drug prices, and her administration “will crack down on drug companies that block competition and abusive practices from pressured pharmaceutical middlemen .” Pharmacies' profits are falling and costs for consumers are rising.”

As we wait for Election Day, the biopharma industry is at the peak of its third-quarter earnings results. But as Seigerman noted in a note earlier this month, third-quarter earnings season “feels like the calm before the storm as many investors wait ahead of the U.S. election.”

The Trump wildcard in drug pricing

While Trump has not made drug prices a focus of his 2024 campaign, as he has done beforehand2016 and 2020presidential election, pointed out Kirsten Axelsen, a non-resident researcher at the American Enterprise Institute BioSpace that “Trump is one of the few Republicans who has supported price controls on drugs – that has not typically been a Republican stance.”

That sentiment is echoed by John Stanford, executive director of Incubate, a Washington-based coalition of life sciences venture capitalists. Stanford said BioSpace that Trump could make lowering drug prices part of his agenda in a second term as president. “I think he has shown a willingness to use every tool available to respond to populist priorities,” Stanford said. “It's hard to rule anything out [policy] Menu with him.”

Stanford noted that near the end of Trump's term in September 2020signed an executive orderthat Medicare would pay no more for certain drugs than the lowest price for that drug in any member country of the Organization for Economic Co-operation and Development. This order was appealedComplaintsfrom the industry, quickly struck down in court and in December 2021 CMS the “most favored nation” model was abolished under the Biden administration.

During Trump's election campaign released a video last year A Trump campaign spokesman said in a statement that he would sign a similar executive order on the first day of his second term telling drug companies “that we will pay only the best price for drugs that they offer to foreign nations.” STAT In October, he said that Trump no longer stood by that statement and that the video had been removed from the campaign website.

“We are keeping a concerned eye on these policies” of MFN and reference pricing if Trump is elected to a second term, Stanford said, adding that Incubate has not seen anything from the Trump campaign that gives the VC lobbying group an advantage. Trust one way or another. . “Hopefully we don’t have to deal with this again.”

Another open question regarding a Trump presidency is whether he would seek to repeal the IRA. Harris cast the tie-breaking vote for the bill in the Senate, and President Joe Biden signed the IRA Act into law in 2022 – the Biden-Harris administration's crowning legislative achievement, authorizing Medicare to negotiate prescription drug prices for the first time.

Project 2025A blueprint for a possible second term for Trump drawn up by the conservative think tank Heritage Foundation calls for the repeal of the IRA. According to the project 2025Department of Health and Human Services Chapter(HHS), the IRA's Medicare Drug Price Negotiation Program replaced “the existing private-sector negotiations in Part D with government price controls on prescription drugs” that will “limit access to drugs and reduce patient access to new drugs.”

While Trump has done it repeatedly tried to distance himself According to Project 2025, more than half of the document's hundreds of contributors worked in his administration, on his transition team or for one of his presidential campaigns The New York Times.

Harris claims that Trump and his allies want to undo the Biden-Harris administration's progress in reducing prescription drug costsnew pricesfor the first 10 drugs negotiated between Medicare and drug manufacturers under the IRA's Drug Price Negotiation Program.

“His Project 2025 agenda calls for repeal of the Inflation Reduction Act, including key provisions that lower prescription drug costs for seniors,” Harris' economic plan states. “Trump wants us to return to a world where millions of seniors have to choose between filling their life-saving prescriptions and buying enough groceries for the month.”

Harris takes aim at Big Pharma

While Trump's policy priorities regarding drug pricing seem omnipresent, Harris' economic plan, A new path forward for the middle classhas Big Pharma squarely in its sights.

The Harris Plan proposes to accelerate the speed of Medicare prescription drug negotiations by expanding the IRA's cost-savings provisions for the benefit of all Americans. “Harris will allow Medicare to speed up negotiations so that prices for more drugs come down more quickly.”

In a controversial policy area rife with speculation – should Harris win the presidency – the focus is on the potential her administration could rely on so-called “marching rights” under the Bayh-Dole Act of 1980 to revoke patents on certain expensive drugs based on federally funded research. While Trump is unlikely to push for march-in rights to undermine industry intellectual property (IP), given the Republican Party's traditionally pro-business, free market and property rights policies, Harris could do so, Stanford said.

After a nine-month review, the Biden-Harris administration released one through the Commerce Department's National Institute of Standards and Technology Draft guidelines framework on march-in rights in December 2023. Two months later, 78 members of Congress and the Senate called for the use of march-in powers against pharmaceutical companies in one letter to HHS and the Department of Commerce.

In their letter, the lawmakers specifically pointed to the price of Astellas and Pfizer's prostate cancer drug Xtandi, which they said is six times higher in the U.S. than in other countries. By charging exorbitant prices, the letter says companies violated the Bayh-Dole Act's requirement to make the invention available to the public on reasonable terms.

“I could imagine a Harris administration would seek marching rights. “Whether they would actually consider their exercise possible is a question of law,” said Axelsen. However, she warned that “exercising the right to invade would make partnerships with academic institutions toxic, because if they accepted money from the federal government, as many of them do, partnering with them would be riskier.”

According to a 2023 Georgetown University study, Bayh-Dole patents account for a large share of patents in life science categories such as biotechnology (15%) and pharmaceuticals (8%) study.

The study found that most of the top Bayh-Dole patent holders in biotechnology are academic institutions, with 22 of the 25 organizations listed as universities. “It is noteworthy that there are no private companies among the 25 most productive biotech Bayh-Dole patent holders,” the study authors said.

Axelsen claims that march-in law is “the worst way to control drug costs” and applies to a relatively limited number of drugs. “Simply eliminating patents is no guarantee that a generic drug company would offer the drugs at a lower price,” she said. “There are many drugs that are off-patent and still have generic shortages or no one is interested in supplying them.”

Gillian Woollett, vice president and head of regulatory strategy and policy at Samsung Bioepis, agreed. “Yes, intellectual property is important,” Woollett saidBioSpace. But “the bigger issue is the average length of exclusivity before they face competition, which is 20 to 30 years.”

Still, it could well be something the industry will have to grapple with when Harris takes over the White House in January. While the vice president “did not comment specifically on the use of the invasion.” [rights]”” Stanford said, “she was part of an administration that certainly had no problem taking one of the most aggressive and progressive positions on the right to invade – we're still hoping that common sense will prevail there.”