The big biopharma stock rally continued to percolate through Day Two of the aftermath of Donald Trump’s election. And that wasn’t hurt in the least by the president-elect’s promise to reform the FDA once he gets into office, 70 days from now.
Trump’s post-election mission statement for his administration on healthcare — posted at greatagain.gov — starts with the repeal of Obamacare and goes on to make a couple of vague promises that may well spell new benefits for the industry. Included in that roster:
•Advance research and development in healthcare
•Reform the Food and Drug Administration, to put greater focus on the need of patients for new and innovative medical products
Nowhere in that list of healthcare priorities is there so much as a mention of drug prices, which had figured prominently in Hillary Clinton’s campaign. And those two features — promising to push development and speed approvals while staying mum on prices — helped create the impression among investors that the industry would be advantaged by a Trump administration. Or at least the new administration would likely leave it in a more favorable position than Clinton would have created.
During the election, Trump had momentarily embraced ideas like reimporting drugs from countries with lower prices or allowing Medicare to negotiate the price of drugs. But there’s little to prevent him from steering clear of anything now that looks like an orchestrated effort to rein in prices.
There’s not a lot of hard evidence to go on right now, but the buoyant sentiment in biopharma hasn’t been hurt by ongoing analysis, like this from Reuters, speculating that Trump may push for new tax legislation that will allow Big Pharma companies like Pfizer to repatriate billions in offshore accounts. That would in turn inspire a surge of new M&A deals, driving up biotech values after a year in which overall buyout activity has languished.
Aside from Republicans’ likely renewed effort to push through the 21st Century Cures Act — which had been pursued by industry lobbyists — with Republicans in control of the House, Senate and the White House, all we have right now is the indication of which way the legislative wind is blowing.
For now, that looks like a warm breeze to an industry and its investors which recently had a bad case of the chills.
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