Simon Wentworth of ThePhamaLetter.com asked, “How might the outcome of the forthcoming presidential election affect health policy in a country that represents both the largest market for pharmaceuticals, and the most important setting for drug development?” Both candidates are trying to address high drug prices but through contrasting regulatory approaches. Pharma seems to be hedging their bets financially, supporting both candidates with an edge in dollars going to Harris. Is pharma for Harris or Trump?
Inflation Reduction Act (IRA)
The IRA was Biden’s signature policy achievement and he declared in his State of the Union address that he “beat Big Pharma” and got “a better deal” for seniors and taxpayers. Harris made the deciding vote for the IRA passing Congress in 2022. The negotiated prices that will go into effect in 2026 give patients savings from 38% to 79% and the program is expected to be expanded. This first round of reduced drug prices did not unsettle investors because the revenue impact was modest. There is concern that a Democratic administration might be more likely to expand pricing controls to other products or to the private healthcare market. While Project 2025 calls for a complete repeal of the drug pricing provisions. Trump has distanced himself from this controversial document that is viewed as a blueprint for the next Republican administration.
Most Favored Nation
In general, the Republicans and Trump are seen as more business-friendly but Trump did target pharma’s pricing practices while in office. His goal had been the same as Harris but his tactics were different. Instead of the IRA, Trump wanted to tie Medicare to lower international prices under a ‘most favored nation’ rule. This strategy was expected to cost the pharma industry over $100 million annually and was never implemented during Trump’s time in office. Trump also tried to import low-cost drugs from Canada but ran into Canadian resistance and FDA approval requirements slowing implementation.
In this campaign, Trump’s publicly stated views have become more aligned with pharma industry lobbyists who are trying to overturn parts of the IRA such as the Medicare price negotiations. Trump wants to increase competition in the pharma market through generic and biosimilar drugs which could reduce prices by introducing more affordable options.
Affordable Care Act (ACA)
The expansion of health insurance through the ACA has generally been viewed as beneficial for the industry and drug makers seem to be against repealing the legislation, particularly when the only discussion of a replacement plan by the Republicans are “concepts.” Republicans accuse Harris and the Democrats of being “radical socialists” with this insurance plan but healthcare policy expert Stephanie Kennan expects a more conservative approach if Harris becomes President. Keenan says
Harris is “no longer with the ‘Medicare for All’ camp and supports continuing the Affordable Care Act.” Is pharma for Harris or Trump? In this area Harris has the upper hand.
Where’s the Money?
Pharma political action committees (PACs) have spent over $12 million on campaign contributions in 2023 and 2024. This breaks down to $5.2 million to Democrats and $6.6 million to Republicans. Yet in the Presidential race Harris has been the top recipient of dollars from employees of pharma manufacturers with twice the giving going to Trump. Harris has also received more than $5.3 million in campaign contributions from industry players in 2023 and 2024 compared to less than $900k for Trump.
Trump has aligned himself more closely with the top lobbyist in the pharma industry, the Pharmaceutical Research & Manufacturers of America (PhRMA) which has a lobbying budget of over $16.9 million. Pfizer is second with $6 million and Merck, Novartis and Eli Lilly all gave over $4 million in 2023 and 2024. Is pharma for Harris or Trump? In the financial support being given it is a toss-up.
In the new Congress and Legislative branch in 2025 the pharma industry will be navigate some adversarial waters no matter who is elected. But with a strong economy and high levels of innovation, better patient outcomes and pharma industry success looks to be assured.
Interested in a career in the pharmaceutical industry? Contact Smith Hanley Associates’ Pharmaceutical & Biotech Executive Recruiter, Nihar Parikh at nparikh@smithhanley.com.
