hile the future of the biopharma
and device industries is mostly
dependent on what happens
in labs and clinical trials, their
ability to innovate and successfully market
medicines, devices and services operates
in a policy soup often flavored by who
occupies senior positions in the White
House, Congress, the Supreme Court, the
Department of Health and Human Services
and the Food and Drug Administration.
Right now, President Donald Trump has
put himself right in the center of healthcare
policy; meeting face to face with CEOs
of the life sciences industry, negotiating
directly with House Speaker Paul Ryan
and other Members of Congress regarding
the failed Trump/Ryan American Health
Care Act of 2017, and meeting directly with
Democratic members on drug prices.
Indeed, Trump has focused his favorite
weapon – Twitter – on everything from
killing Obamacare to lowering drug
prices. Although medical marketing so
far has escaped the Twitter sword, who
knows what may become his next target?
Companies and trade associations have
stayed up nights preparing for possible
instant notoriety of the worst kind. And,
best they should because the press and
policy makers cover, comment, examine
and amplify the reach of every Tweet.
Recall just a few utterances and Tweets
from Trump on drug prices while he was
the candidate and later the president-elect:
“They’re getting away with murder!”
“We’re going to start bidding!”
“We’re going to save billions of dollars!”
Trump’s statements and actions as
president have been more nuanced,
complicated, contradictory and in many
ways untraceable. (But there is no reason to
expect we’d be treated differently from any
other industry.) Consider these more recent
pronouncements and positions:
1. Trump statements on “repeal and
replace” of Obamacare legislation often
have been vague and shifting. Even
now, there is no clear path forward for
2. Trump had a warm meeting with the
CEOs where he emphasized the value of
drug innovation, the leadership of domestic
producers, and promised to ensure that
other companies “paid their fair share”
through trade agreements.
3. Trump promised to lower taxes,
enable repatriation of foreign profits and
to “deregulate” and “reform the FDA.” In
short: “You guys are going to do great!”
4. But after that meeting criticism of
drug pricing resumed. Indeed, Trump
sometimes has favored re-importation
and government negotiation of purchase
prices, but other times he has deflected and
avoided the topic.
The most meaningful policy happening
so far has been the somewhat spectacular
failure of the Trump/Ryan “Repeal and
Replace” Obama Care bill. While huge for
the public health and patients throughout
the country, the defeat was quietly, on
balance, pretty good for pharma.
Remember, PhRMA and pharma
supported the Affordable Care Act (ACA).
There, the cost;benefit balance favored
the industry, considering four major
1. ACA coverage created tens of millions
of new customers; Trumpcare risked up to
24 million insured.
2. The ACA increased the Medicaid
rebates (discounts) from 15 percent to
23 percent; under Trumpcare, discounts
stayed, but the number of insured dropped.
3. The ACA drug fee of 1 percent would
have been dropped under Trumpcare, a
small windfall for the drug industry.
;. The Essential ;ealth Benefits (E;Bs)
of the ACA could have been eliminated
under Trumpcare, including the possibility
of reducing the drug benefit.
That brings us to the other huge issue for
pharma: drug prices. Remember, prices,
profits and promotional spend are all
linked together. If prices and profits fall,
spend will drop dead.
Pressure on drug/device/bio pricing is
intense and comes from multiple sources,
Most importantly, increased market
pressure has been chipping away at
pricing flexibility. Indeed, Medicare Part D
insurers and payers already negotiate the
best prices for their systems and customers.
Further, the increasing power of payers to
set formularies and give priority access to
companies granting deep discounts has
taken a serious toll.
Meanwhile, public shaming by Democrats
and Republicans alike, especially of
the anomalous generic monopolists, is
working. Never underestimate the power
of a great example like EpiPen or a bad boy
actor like Martin Shkreli. Moreover, a few
major drug companies, including Allergan,
J&J and Lilly, have made pledges to control
But, perhaps most dangerous are
the actions of Trump himself, acting
as Negotiator-in-Chief, talking down
aggressive pricing and consorting with
strange allies – liberal Democrats – on
tactics to lower prices. Watch carefully
the continued discussions led by Rep.
Elijah Cummings, D-Md., supporting
transparency, re-importation and direct
In short, the president matters. None
more so than this president, who has
staked his presidency on his ability to
negotiate the best deal for voters. Stay
Policy challenges in the life sciences
industries in the age of Trump
The final word