The Impact of the U.S.Presidential Election on the Pharmaceutical Industry

As November approaches, the topic of the upcoming United States Presidential Election is becoming more and more significant. The impact of the election is likely to influence the world in many ways, because whoever comes to power in Congress and as President will likely play an important role in the way the industry develops, grows, and changes. It is not easy to predict how things will go, and the results in the past have been surprising. However, it is still worth considering the potential scenarios and the predicted impact on the pharmaceutical industry.

The first prediction is that the changes are more likely to be incremental than sweeping and depend more on the opportunities than the outcome of the election per se. It is possible that the pharmaceutical industry will see fewer changes if both the current president and congress remain or different regulations if either or both of these elements change. Some elements, however, are likely to remain the same way (1).

There is the possibility that the U.S. Food and Drug Administration (FDA) and other government agencies are subject to change, but this change is likely to be slow due to the existing structures and bureaucracy, especially if there is no strong drive from the government to change or reform it. Regulatory structures are likely to continue as they were. And healthcare supplies industry may remain the same. The inertia that the industry has provides strong support for the idea that unless there is strong regulatory action, things are likely to remain the same. It may be important to cultivate relationships and strong networks within the industry if there are significant changes in who is in charge, and it is likely that the election may provide new opportunities in this regard (1). There is a good chance that many bureaucratic structures will remain the same way and that the changes will be slow. At the moment, it is not very easy to predict how exactly things are going to go, but there are likely to be both opportunities and limitations.

Both presidential candidates have pledged to lower prices and spent considerable time debating the issue.  There has been a significant push in the House and the Senate to pass bills that try to reduce escalating drug prices and surprise medical billing. The issue is on the agenda for both the Democratic and the Republican parties, however, the rising tension between the two and growing political conflict can make it difficult for these bills to be passed successfully. In general, in election-year, there are likely to be fewer policy changes and an overall slowing down of the reform process. This means that changes are more likely to come after the administration changes or remains the same, which creates a sense of uncertainty in the industry (2).  Other topics of discussion may include but not limited to shifting pharmaceutical and medical device production,  industry response and impact, latest pharmaceutical, medical device, and healthcare expenditure forecasts for the U.S. and electoral scenarios and expected changes to healthcare policy.

If Trump remains in office, then the expectation is that the administration will continue its course to restructure Medicaid and reduce the growth of enrollment in this program by implementing work requirements and other limitations. On the other hand, a Democrat administration is more likely to choose a different course, focusing on an expansion of Medicare for all initiative, which will likely have a strong effect on private health insurance (2).

Moreover, the Trump administration has been involved with a trade dispute with China and has attempted to set tariffs for Chinese imports, which are likely to influence the profits and income of pharmaceutical companies, as many rely heavily on ingredients and supply chains in this country. However, this issue will not be necessarily resolved even if there is a Democratic win (2).

High prices are likely to continue to be an issue due to the changes and new drug developments in the industry, especially among new gene therapies, which might force the issue to be a focal point for any administration. Over 70% of voters have said that their decision is likely to be influenced by each candidate’s healthcare policies and the rising drug prices are a big part of that issue (2).

Trump has expressed negative opinions about the pharmaceutical industry, believing that it is cheating the U.S. While this has not led to concrete change, there has been an impact on stock prices in the past. The impeachment process, according to certain statements he has made, might have been led by the pharmaceutical industry, which could mean that Trump bears a grudge due to this belief. If Trump gets elected again, he could pursue a more aggressive course of action against pharmaceutical companies.  On the other hand, Democrats have been pushing for price regulations and solutions to many issues with the industry today (3). Regardless of the outcome, there may be an impact on the pharmaceutical industry, albeit the change is likely to be slow.

Overall, it can be said that there is a lot of uncertainty, but regardless of who wins the elections, there may be changes in the pharmaceutical health supplies industry. Some concerning aspects relate to the possibility of higher regulation, more focus on pricing control, limitations on pharmaceutical import products and ingredients, and changes to the existing Medicare policies. The following years are likely to bring further changes, albeit slow and incremental ones. It is likely that there will not be quick outcomes due to the existing inertia and the overall slow pace of bureaucratic structures and agencies.

The current economic setup has benefited “Big Pharma” and pharmaceutical  industries. However, more pressing issues are likely to arise in the following years. New treatments, drugs, and vaccines, as well as rising healthcare costs might encourage voters to make specific choices and also to push for more accessible healthcare. It can be said that in the following years, regardless of the outcome of the election, there are likely to be challenges in the pharmaceutical industry that will need to be addressed and might lead to changes. How the industry chooses to respond and push against these changes or go along with them remains to be seen. Furthermore, whether all that talk will translate into any action will depend on who wins the White House and Congress in November.

References 

1. Lassiter, J. (2020). https://www.naturalproductsinsider.com/regulatory/potential-impact-2020-presidential-election-supplement-industry

2. Coombs, B. (2019). https://www.cnbc.com/2019/12/12/drug-prices-and-health-care-are-wild-cards-in-the-2020-election.html

3.GlobalData Healthcare. (2020). https://www.pharmaceutical-technology.com/comment/2020-turbulent-pharma-industry/

About the Author:

Lin Zhang, M.D., senior director of a health care industry company in the United States. With the experience in clinical medicine, biotechnology, health industry and other fields, he is responsible for the research and development of plant medicine, functional food and health products. He was a clinician and worked for the National Cancer Institute, FDA and the National Cancer Center of Japan for many years.