In less than a month, Americans will head to the polls—or vote by mail—and elect the next president of the U.S. With Republican candidate Donald Trump and Democratic nominee Kamala Harris vying for the White House, it's looking like an election that'll come down to the wire.
For the pharma industry, though, the already-in-place Inflation Reduction Act (IRA) and a divided Congress make it unlikely that either candidate will bring about major changes to drug regulations. That's the takeaway from a recent note by BMO Capital Markets analysts Evan David Seigerman and Kostas Biliouris, Ph.D., as well as a joint interview with them.
Still, the Republican candidate may be more favorable for "biopharma sentiment" than Harris, according to the note.
The two candidates have voiced opposition to high drug prices at times, but they diverge on their approaches to reducing them.
While Harris’ stance leans on priorities already seen over the past four years during the Biden administration, a Trump win could bring about less Federal Trade Commission intervention, favorable tax rates for corporations and drug pricing reform that targets pharmacy benefit managers rather than pharma companies.
When looking at Harris' record and her potential presidency, “we’ve already gotten pricing reform,” Seigerman explained in an interview, referring to the Biden administration’s passage of the IRA. As vice president, Harris was the tie-breaking vote for IRA in the Senate, helping pass that legislation in 2022. A Trump win, meanwhile, likely wouldn’t lead to IRA expansion.
Either way, drug pricing reform “doesn’t seem to be the biggest focus” for either party, Seigerman added, although that’s subject to change.
As for the Medicare Part D redesign (PDF) that's looming under the IRA, this will play out regardless of the election winner, Bilioruis emphasized. The redesign lowers patients' maximum out-of-pocket costs, introduces a new manufacturer discount program and more.
The changes could play out differently at companies across the industry. For instance, Incyte and Neurocrine have indicated that the redesign could be beneficial to their Medicare revenues, according to the BMO note, while Gilead Sciences has indicated that the Part D redesign could be a "headwind."
Elsewhere, Pfizer was named as a company that could see some effect from the election, given that its "consistently lower” tax rate could be threatened by a Democratic win.