The Elephant (or Donkey) in the Room

October 2, 2020
Felicity Thomas
Volume 44, Issue 10

European pharma companies may have a vested interest in the outcome of the US elections.

With the United States presidential election merely days away (set to take place on 3 Nov. 2020), the world’s gaze has shifted to the race for the White House and whether there will be a Republican or Democrat taking office. As reported by UBS, the Chief Investment Office, while there is not usually a global interest in national elections, the US presidential election has a significant relevance to many global countries, including those located in Europe (1).

Drug pricing

For pharmaceutical companies, there has been a certain level of turbulence for some time over the issue of drug pricing in the US. Donald Trump, the current president (at the time of writing), had pitched the reduction in drug pricing as one of the key pillars of his original presidential campaign back in 2016 and has continued to raise the issue throughout his tenure as president, with it being made a central theme to his 2020 campaign (2).

However, in terms of policies, little has changed over the course of the past four years, despite the signing of four executive orders on 24 July 2020 that Trump had touted as being of great importance in the reduction of drug prices and linking US pricing to that of other nations (2).

The issue of pricing is high on the agenda for the Democrats as well, with the party’s candidate, Joe Biden, advocating several policies that would see drug prices reduced during his campaign. Biden’s policies include the appointment of a government board to set prices, limiting drug price increases, and cracking down on patent manipulation (3). These proposed policies by the Democratic candidate will certainly have ramifications for pharmaceutical companies should they become bills and are voted into legislation.

House and Senate divisions

Currently, the Republican party controls the Senate and the Democratic party controls the House of Representatives. This division basically means that any big legislative change is generally ruled out. However, if this circumstance were to change, there would be potential consequences for European pharma companies that have a presence in or deal with the US.

A Republican president and control over Congress may pave the way for a boost to US drug manufacturers as Trump aims for the population to ‘buy American’ and for there to be less reliance on drugs manufactured offshore. Additionally, Trump has negotiated deals to extend patent protections, as a way of providing an advantage for US manufacturers, which may increase US drug exports but may also delay any price reductions (4).

If the Democrats win the presidency and have control over Congress, it is expected that foreign and generic-drug manufacturers would benefit as a result of lower market entrance barriers. However, patent-holding manufacturers may be exposed to increased competition and would potentially experience revenue loss (4).

COVID-19 vaccines

Finally, the issue of a COVID-19 vaccine is proving to be divisive for the presidential candidates, as reported by the Financial Times (FT) (5). The tables have almost turned for Trump, who has historically provided a voice for the anti-vaccination movement, FT reported. Now, Trump is pushing for a quick approval of a vaccine for COVID-19, while Biden is urging caution.

However, the political back and forth could lower the public’s confidence in immunizations (5). In response to the rising public concern over vaccines, nine biopharmaceutical companies signed a joint statement committing to uphold regulatory guidelines and scientific principles in vaccine development (6).

In light of the issues in contention and the possible impact on the pharma industry, it is inevitable that the result of the 3 Nov. 2020 election will be eagerly anticipated around the world. But whatever the outcome, be it blue or red, stay alert, stay safe, and stay healthy.

References

  1. UBS, “The Global Impact of the US Election,” ubs.com, Press Release, 22 July 2020.
  2. S.G. Stolberg and M. Sanger-Katz, “Trump Keeps Promoting a Drug Order That No One Has Seen,” The New York Times, Published 24 Aug. 2020, Updated 23 Sept. 2020.
  3. J. Nathan-Kazis, “The Election Will Have a Significant Impact on Health-Care Stocks. Here’s How,” Barron’s, Feature, 13 Aug. 2020.
  4. M. Powers, S. Zaidi, and J. Graham, “The 2020—Winners and Losers in Healthcare,” Portland, 27 Aug. 2020.
  5. K. Stacey and H. Kuchler, “COVID Vaccine Becomes Divisive Issue in US Election Campaign,” Financial Times, 11 Sept. 2020.
  6. International Federation of Pharmaceutical Manufacturers & Associations, “COVID-19 Vaccine Maker Pledge,” ifpma.org, 8 Sept. 2020.

About the Author

Felicity Thomas is the European editor for Pharmaceutical Technology Group.

Article Details

Pharmaceutical Technology Europe
Vol. 32, No. 10
October 2020
Page: 5

Citation

When referring to this article, please cite it as F. Thomas, “The Elephant (or Donkey) in the Room,” Pharmaceutical Technology Europe 32 (10) 2020.

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