The 2016 U.S. election had a big, albeit short-lived, effect on biopharma, with Hillary Clinton’s drug pricing tweet sinking stocks and putting a chill on a hot IPO market. This time around, drug pricing is arguably higher up the agenda, setting the stage for another bumpy ride.
All the front-runners in the Democratic presidential primary are calling for measures to drive down drug costs, for example by empowering Medicare to negotiate prices with drugmakers. At this stage, it is too early to tell which of these policies will become a focal point of the 2020 election, but given the negative public opinion about drug prices and President Donald Trump’s willingness to sound off about the cost of drugs, it seems likely the topic will be a focus of the campaign.
That creates the potential for near-term turbulence and possibly more lasting, significant effects once the next president takes office. If the changes the next president enacts make VCs and biopharma companies skeptical that risks taken on drug R&D will be handsomely rewarded, their willingness to invest in discovering and developing new products could dwindle.
For now, that scenario remains hypothetical, but the recent introduction of the Lower Drug Costs Now Act shows some politicians are willing to turn talk into action. It is feasible that biopharma will end 2020 facing the most uncertain, potentially damaging political environment in years.