‘Buckle Up’: Second Trump Administration May Be ‘Mixed Bag’ for Health Care, Biotech

The second administration of Donald Trump may well run the gamut as far as its impact on health care and pharma. Biotech companies may benefit from a good business environment, prompting more mergers and acquisitions, but they may also experience challenges in working with what could be somewhat unconventional leaders of federal agencies, such as Robert F. Kennedy Jr., whom President-elect Trump tapped on Nov. 14 to run HHS.

RFK Jr., a politician and environmental activist who has questioned the safety and efficacy of vaccines and spread misinformation about them, has said that “there are entire departments, like the nutrition department, at FDA that have to go, that are not doing their job.”

During a Nov. 12 LinkedIn Live conversation, Allison DeAngelis, biotech startups and venture capital reporter at STAT, said she and her colleagues had felt “a little bit of a muting or a quiet” within the pharma and biotech industries during the days leading up to the election. “Everybody knows from a business perspective that whatever happens nationally…with the presidential race is going to have a big impact on our business, and…they’re going to have to work with that administration.”

The election results will impact the health care industry in multiple ways, she explained, from regulations issued by different agencies to geopolitical dynamics and an “undercurrent” over the last five years of “anti-science rhetoric and…pharmaceutical companies being in the spotlight for a lot of things like drug pricing.”

Based on conversations she had with industry experts, a second Trump administration will be “a little bit of a mixed bag.” Changes are likely to occur at the Federal Trade Commission (FTC), “and that’s going to be probably positive” for mergers and acquisitions, “so that’s good for the biotech industry,” DeAngelis maintained. “Biotech and pharma are big users of mergers and acquisitions to build their business, so any change in that realm is good for them.”

Under current FTC Commissioner Lina Khan, the agency got involved in some proposed industry deals, including Sanofi’s acquisition of a license to a Maze Therapeutics Inc. pipeline therapy for Pompe disease and Amgen Inc.’s purchase of Horizon Therapeutics plc. “One of the concrete things that we know is that there will be a new administration at the FTC, and there will be changes in that agency,” she stated. “So that is going to be something that we’ll probably see a pretty quick reaction to from the industry in terms of dealmaking.”

Concern Exists Around ‘Anti-Science Rhetoric’

On the other hand, continued DeAngelis, “there’s an undercurrent of uncertainty and concern in some cases about potentially a second era of anti-science rhetoric, which really got brought to the forefront in the first Trump administration.”

Many executives within the industry were hesitant to share their thoughts, she noted. But of those who did, several acknowledged that while another Trump administration might be good for business, “what about the human and ideological concerns that we have? What about the ability of the people that we’re designing drugs for to be able to get better health care?” What about “women’s health rights and abortion access?...And if you have RFK Jr. levying influence in this White House, does any of the business stuff actually matter? Is it all just BS?”

Rachel Cohrs Zhang, STAT’s chief Washington correspondent, said during the LinkedIn event that she also was hearing “mixed feelings” among industry executives “because I don’t think that a second Trump administration will look exactly like the first one,” where “we saw the president turn to people who largely had industry experience: Eli Lilly, large drugmakers who had worked at the state level in state government on health care policy. And, depending on who he appoints, that might look very different.

“And I think the populist sentiment and the anti-corporate sentiment that’s coming from some of these actors has people concerned,” she continued. “But I think on the other hand, the for-profit companies are looking forward to the likely renewal of the Trump tax cuts next year. So I think there’s just a lot of a lot of mixed feelings and a lot of questions about personnel.”

Health insurance executives have expressed concerns “around renewing subsidies for Affordable Care Act plans that Democrats had passed,” she stated. “They lowered premiums for a wide array of people, and…we could see lower insurance rates if those are allowed to expire wholesale.”

Concerns from those stakeholders also exist about possible Medicaid cuts, especially since health plans have “become so intertwined with the Medicaid program,” with for-profit insurers administering many Medicaid plans. “So I think insurance definitely seemed like the area that was most impacted.…There could certainly be policies that impact pharma, impact hospitals in ways that they may not be very happy about, but I think insurance is the most obvious and immediate impact right now.”

That said, Medicare Advantage (MA) may be the outlier, said Cohrs Zhang. “I think those plans are feeling pretty good because actually Republicans have been more friendly to MA plans and privatization of Medicare in general.”

On Nov. 19, Trump named Mehmet Oz, M.D., aka television personality Dr. Oz, as his choice for CMS administrator, overseeing Medicare and Medicaid. Along with Kennedy, who campaigned on the concept of “making America healthy again,” the pair is likely to focus on disease prevention. Trump also indicated that they would tackle “waste and fraud” in his statement regarding Oz.

Trump as of AIS Health press time had yet to name his selection for FDA commissioner; Politico on Nov. 19 reported that the Trump transition team was interested in Marty Makary, M.D., a surgeon and public policy researcher at Johns Hopkins University.

Will Changes Be Made to IRA?

With Republican majorities in all three branches of government, DeAngelis said it’s possible there could be some “softening or revisiting of the Inflation Reduction Act [IRA], which pharma has really lamented the passage of and has decried as harming innovation. There’s not a sense that it’s going to get repealed altogether but a sense that we could kind of go back and chip away at that…and make it a little bit more palatable to industry.” Doing that would mainly impact big pharma companies with blockbuster drugs that could have their prices negotiated by Medicare.

She also pointed to the BIOSECURE Act, “which has been a big point of conversation in the industry.” The legislation would limit federal agencies’ contracting with certain biotech companies, including Chinese ones. It “is looking more and more certain as the days go on that that is legislation that could be moving forward and could parse out,” said DeAngelis. If passed, that law would benefit U.S.-based contract research organizations and contract manufacturers “because a lot of the organizations that have been hit so far by the threat of BIOSECURE are companies like WuXi, Chinese contract research and manufacturing organizations.”

Another area for the biotech industry to watch is Trump-promised tariffs. DeAngelis pointed out that “we haven’t really gotten a lot of concrete details yet about what these tariffs might look like,” but with the industry being very multinational, there has been a lot of “influence between U.S. and Chinese companies, [with] clinical trials being run in China, products being brought in from China. So if we do see tariffs levied against China and Chinese drug companies, that is probably something that will impact our biotech ecosystem.”

RFK Jr. Raises Questions, Concerns

While the LinkedIn conversation was held two days before Trump said that he would nominate RFK Jr. as head of HHS, the speakers still touched on the ramifications of giving him a great deal of power. Trump, DeAngelis noted, had spoken about giving RFK Jr. “access and kind of ownership” to several agencies. During an Oct. 27 rally in New York City’s Madison Square Garden, Trump said he’d let RFK Jr. “go wild on health,…go wild on medicines.”

“That raises a lot of questions and concerns in the biotech and pharma industry because, as I think many of our audience members can attest to, biotech and drug development is a years-long process. It’s a very expensive process. And companies like to know who their point person at the FDA is,” she said. “They like to know ‘Oh, so-and-so is reviewing my application; that gives us a sense of certainty that we can know what kind of guidance we’ll probably get from them.’ The introduction of RFK kind of throws a wrench into that.”

His “anti-vax rhetoric” also raises questions around companies with a focus on vaccines. While DeAngelis said that “people that I talk to in industry aren't particularly concerned for what that means for vaccine developers.…There's a sense that vaccine makers probably don't have to worry quite yet, but it's something to watch.”

However, the day after Trump revealed his HHS pick, stocks for the companies — including Pfizer Inc., Moderna, GSK and Sanofi — dropped.

DeAngelis stated that many industry stakeholders have pointed out that in Trump’s first presidency, he tapped Scott Gottlieb, M.D. — “a well-respected person in the biotech and pharma industry on both sides” — to be FDA commissioner. However, “it seems unlikely” that he’d return in the same role for the new administration, she explained, as he reportedly is not interested in the position. “And so that kind of leaves open a question as to what kind of person would be installed as commissioner and have control of that agency in the midst of quite possible upheaval.”

Looking forward, with Republican control of Congress, “a Trump administration can do a lot, honestly, to change a lot of things here,” declared Cohrs Zhang. “I think there are certainly some policies where they might have more trouble than others,” such as complaints about drug ads on TV.

“But I think with Republican control of Congress, they can do a lot, and they don’t need Democrats to do it either with the numbers that they’ve won in this kind of red wave that we’ve seen,” she said. Changes could be made to agencies’ structures, public health reform and government funding.

“I think it’s going to be a very different conversation than we’ve seen with Democrats with control of at least two of these kind of entities, the White House and the Senate, in recent years,” said Cohrs Zhang. “I think COVID has changed how a lot of these new lawmakers who are coming in view public health and science and research, and I think we’re just going to see all of those dynamics play out in the next few years. So, yeah, buckle up.”