As the Trump bump for biotech continues to reverberate after he became president-elect on Wednesday, biotech may now have more to celebrate as a new, but lightly detailed, healthcare update is being seen by some as a positive read-through for the industry.
In the latest Healthcare section of Trump’s website, he says his administration will “Advance research and development in healthcare” and more pointedly “Reform the Food and Drug Administration, to put greater focus on the need of patients for new and innovative medical products.”
Some have read this as being a boon for biotech, especially the latter section. Trump and the Republican Party are known for wanting to deregulate as part of their broader political philosophy. Deregulating the agency could in essence help remove barriers to approval.
The FDA too has over the past four years been making an active effort to speed up its processes and get more meds on the market more quickly than ever before, using new systems such as breakthroughs, fast tracks and priority reviews.
What reform will actually mean remains highly vague, but alongside the apparent lack of appetite to push for drug pricing reform from the Party--which will hold control of all the main branches of government next year--these changes have helped continue the rally in shares for the Nasdaq biotech index ($IBB) and the S&P biotech ($XBI), which were both up around 9% on Wednesday and continued to rise by 1.6% and 3.1% respectively yesterday after a dismal October.
But reform may not always prove to be a good thing, and uncertainty still reigns; both the NBI and S&P biotech were trading down premarket this morning, as the good vibes seem to be leveling out.
The 21st Century Cures bill, sitting in Congress for around a year now after passing the House in 2015, has also now become a top priority along with government funding, according to Republican Senate Majority Leader Mitch McConnell, when it returns.
McConnell said that Trump is “interested in precision medicine on that; that incoming VP [Mike Pence] is interested in the Cancer Moonshot [from outgoing VP Joe Biden] part of it; and I’m [McConnell] interested in the regenerative medicine part. I want to see us finish that important new measure this year.”
The bill’s aim is to involve patients more than ever before, notably their medical experiences, which includes gathering patient data and leaning more on the burden of disease.
The biggest financial implication is the several billion extra dollars earmarked to be pumped into the NIH and clinical research, with the bill promising billions of dollars over the next five years to create an “NIH Innovation Fund” and $550 million also coming in added funding to the FDA over the same period.
This funding has however irked some Republicans, who dislike high government expenditure in general, and Trump has in the past questioned the NIH’s purpose--so what will happen on the funding side remains unclear. The spectre of ripping up Obamacare, and perhaps of allowing Medicare to negotiate drug prices, are also policies that may keep some CEOs up at night.
There is also the threat that the bar is being set lower and lower for the FDA to approve new meds--a situation that has angered some at the agency in recent months, coming to a head with the controversial September approval for Sarepta’s DMD med Exondys 51, with several FDA experts questioning why such weak evidence led to a regulatory green light.
Equally worrying for some is the revelation, discussed by Forbes last night, that the next vice president has in the past rejected the premise of evolution, with a broader trepidation from some scientists about how highly regarded their field will be under the incoming administration, given that Trump is already set to undo a host of policies related to climate change.