The Impact of the US Election on the Drug Development Industry

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In the next few days, the United States will elect a new President. Please know that this blog does not promote one party or another. Most Americans will just be happy the election process will be over.

The outcome of the US presidential election can significantly influence the drug development industry and the biopharma industry in various ways, with a few listed below.

Here are several examples of changes that can impact the clinical development industry.

  1. The BIOSECURE Act is a notable piece of legislation that could affect over 120 US biopharmaceutical drugs currently in development, particularly those developed in partnership with Chinese organizations. Companies like Merck, Gilead Sciences, and Vertex Pharmaceuticals have reported that this act may lead to increased costs, delays in clinical trials, and issues with FDA regulatory submissions and drug launches. This indicates that the political climate surrounding the election can directly impact drug development timelines and operational costs.

  2. The upcoming election may lead to changes in the regulatory environment and pricing policies.

  3. The election outcome could lead to significant changes in healthcare policies including drug pricing policies, which have historically impacted the biopharma industry. The recent Inflation Reduction Act (IRA) has raised concerns among biotech companies regarding its long-term implications on competitiveness and investment attractiveness. Industry groups, such as the Biotech Industry Organization (BIO), have expressed dissatisfaction with how the IRA might discourage investments by incentivizing shareholders to favor more profitable drugs. The potential for further regulatory changes under a new administration could either alleviate or exacerbate these concerns. For instance, the Affordable Care Act (ACA) has already changed how healthcare is financed, and any future reforms could further affect drug pricing and reimbursement processes. Political pressure regarding prescription drug costs is mounting, which could lead to new legislative initiatives that may alter the competitive landscape for pharmaceutical companies.
  4. The election results can also affect investor confidence in the pharmaceutical sector. For example, if the outcome leads to policies perceived as unfavorable to drug pricing or development, it could deter investment in biotech firms, which are crucial for innovation and drug development. Research indicates that a significant number of venture-backed companies are already experiencing a downturn in funding, which may be exacerbated by the political climate post-election.

  5. There may be potential broader economic implications of the election that can come into play. While some analysts believe the US economy is resilient and may not be significantly affected by the election outcome, uncertainties surrounding trade policies, inflation, and regulatory changes can create volatility in the market, which in turn affects the pharmaceutical industry. The potential for economic recession or shifts in government policy can lead to increased scrutiny of drug prices and accessibility, potentially impacting revenues for pharmaceutical companies.

  6. The election may impact the future of technologies and artificial intelligence within the industry and how the industry embraces new technologies.

In conclusion, the drug development industry continues to be exciting with change and technology enablement, and US election can have profound implications for the drug development industry through legislative changes, regulatory impacts, shifts in investor sentiment and technology factors. Companies within the biopharma industry must remain vigilant and adaptable to the evolving political landscape to mitigate risks associated with these changes. What role do you think the election will play in the future of our industry?

Author:
Clareece West
President, Europe & the Americas

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