Few of us will soon forget waking up in Cologne to the news that we will soon have a “President Trump” in the Oval Office in a few months.
So, what will a Trump Administration mean for our industry?
The short answer is “Who knows?”
For better or for worse, we Americans have elected not only a complete political novice, but an individual who clearly does not play by the understood and established rules and norms of diplomacy, behavior, and tact.
Indeed, while our Electoral College was designed, in part, to add a level of discernment to the process, it is clear it cannot do so in all cases.
Additionally, politicians generally say whatever it takes to get elected. So campaign statements and promises are not worth the electrons spent in communicating them.
Therefore, we as an industry are in a “watch and wait” mode until his Cabinet selections and plans moving forward become a bit clearer.
In fact, nothing is clear at this point. Predicting where our industry will go in the next four years, to the extent it is impacted by this Administration, remains a very open and uncertain question. Caveat emptor.
However, there are a few items we can start thinking about, just based on the election process as a whole:
Corporate “Profiteering” Will Continue – We were deeply disturbed by comments made by candidates Clinton and Sanders about their wanting to target “Big Business” in general, and the pharmaceutical industry in particular.
Coming at a time when companies were making headlines over drug prices, our cause was not being helped by CEOs testifying before Congress.
Meanwhile, studies continue to point out that prescription medications continue to be the lowest portion of healthcare costs.
Therefore, a Trump administration will likely not be too bothered with companies setting prices which they feel are appropriate, and which are negotiated with the payers.
Lower Corporate Taxes – Statements made during the campaign suggest that the next administration will aim to lower corporate tax rates, currently approaching 40%. This is good for all US-based corporations, including US-based pharma and biotech companies.
If lower taxes mean more jobs in the US, so much the better.
Pro-Business, Not Pro-Freedom – A Trump Administration will pursue pro-business policies, provided they create American jobs. However, statements about taxing companies who leave the US are troubling.
Will this impact a company’s ability to reverse merge into a company located in a country with a lower corporate tax rate? The current administration has done what it can to scuttle inversions. Will this continue?
What a company does with their tax savings is their businesses. But let us assume that tax savings are invested in R&D, or distributed to shareholders. Do we want an administration creating a policy which discourages companies from doing what they feel is in their best interests with their profits?
And what is an American pharmaceutical company these days. Pfizer may have started in Brooklyn, but are they still an “American” company? Is Merck? BMS?
Our concern is that any bill introduced in the legislature which curtails corporate freedom will result in a wave of reincorporations, reverse mergers, and other events which could shrink and reshape the US pharmaceutical industry forever.
Only the bankers and the lawyers will be the winners under that scenario.
Obamacare – The Affordable Care Act is designed to provide more Americans with access to healthcare insurance. Obamacare resulted in increased prescription drug usage (primarily generics).
Some suggest that Obamacare triggered massive prescription drug price increases, further increasing industry “profiteering.”
But, the impact of Obamacare on overall costs remains largely unknown.
Now the incoming Administration is looking to scrap Obamacare and replace it with something better. However, replacing Obamacare will not be easy, even if the replacement is better.
Attitude Towards Science – The absurdities regarding President Elect Trump’s statements on global warming lead us to concerns about this Administration’s views on science in general. Will NIH funding suffer?
We would not think so, given that NIH results in the creation of thousands upon thousands of jobs in both academia and industry, not to mention the font of innovation for entire industries.
Conclusion – We have no idea what will happen. And this fact is perhaps what is so troubling. We have elected a President who is simultaneously pro-business and against business freedom and choice.
He wants to grow the US economy by keeping jobs in the US, and by lowering corporate taxes. Yet, we do not know if a replacement for the Affordable Care Act will be increase access to prescription medications or not.
He wants to reduce corporate taxes and simultaneously force companies to stay by imposing a “So Long America” tax. Will companies want to come over to the US if leaving becomes difficult?
Lastly, he has made statements to the effect that he will appoint the “best and brightest” to join his administration and “Make America Great Again.”
While this sounds laudable, whether or not this incoming Administration will be a net positive for our industry remains deeply unknown.