Undeniably, this has been one of the most exciting runs for the presidency in the past 40 years. Following all of the polling surprises and primaries is almost more fun than watching the Giants win the Super Bowl.
As with any other heavily regulated industry, whoever wins could have an influence on the pharmaceutical and biotech industries.
On Super Tuesday, with a large number of Democratic and Republican primaries underway, let's take a look at the leading candidates and their positions on health-care issues that could affect those industries if they were enacted.
Not a field of differences
Here's a breakdown of policy goals that could have the most direct effect on drugmakers, as promoted on official candidates' websites. I'm not recommending any candidate but rather looking at how each of these policies could affect the pharma and biotech sectors.
|
Candidate |
Goals |
|---|---|
|
Hillary Clinton |
Push for a fivefold increase in the number of patients involved in cancer clinical trials. Push for a pathway to approve biogenerics. Allow Medicare to directly negotiate prescription drug prices. "Crack down" on some prescription-drug advertising. |
|
Barack Obama |
Allow importing of drugs that are sold in other countries for less. Advocate for increased use of generic drugs by public providers like Medicare. Establish a government institute for comparative research between drugs. Allow Medicare to directly negotiate prescription drug prices. |
|
John McCain |
Work to pass tort reform and eliminate excessive damage awards. Push for a pathway to approve biogenerics. Allow importing of drugs that are sold in other countries for less. |
|
Mitt Romney |
Establish federal caps on "non-economic" and punitive damage awards. |
Most of the top candidates have fairly similar goals. The biogenerics push could be a boon for companies like Momenta Pharmaceuticals
Allowing more pharmaceuticals from cheaper locales into the U.S. may have an effect on the profits of drug companies, but not necessarily so. That would affect U.S. sales of drugs whose patents expire sooner in other countries than in the U.S., as with Eli Lilly's
Allowing Medicare to directly negotiate drug costs could hurt drugmakers, but its coverage policies already may be taking pharmacoeconomic considerations into account, as we saw last year with Amgen
Foolish final thoughts
It's worth noting that the health-care "reforms" and changes that these candidates propose would have to go through congressional molding. And as we've seen numerous times, a goal hasn't always translated into a policy after the elections, so who knows how things will play out.
As for all the different health insurance coverage and tax packages, the devil is really in the details as to how these policies will affect drugmakers. We have to wait for Congress to hammer out the details of these public and private coverage schemes, so not a lot can be said about whether Clinton's universal health-care ideas or McCain's tax credits for health-care spending (just a couple of examples) would be a boon or a boondoggle for the pharma and biotech industries.
The bottom line, as Rule Breakers analyst Charly Travers often points out, is that any government policy that caps drug costs or alters the profit window would decrease the number of drugs in development. It would also decrease the potential profits for approved drugs. That's simple economic fact.
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