Trump’s win will affect the biotechnology sector

The answers from biotech executives showed that they are not particularly well prepared for the economic policy measures of the Trump administration. Probably also because Trump has not yet presented a finalised concept for the healthcare sector. However, he has pointed out some options, such as giving an avowed vaccine sceptic like Robert F. Kennedy Jr. a leading role in healthcare policy. This shows that his health policy – as we have come to expect from him – could also include unorthodox or disruptive ideas. “I’m going to let him go wild on health,” Trump said in a campaign speech in New York. He has already hinted at what Kennedy means by this. He wants to rid the regulatory authorities of corruption, return them to evidence-based science, and end what he described as an epidemic of chronic diseases.

The pharmaceutical industry is arguably the most heavily regulated industry in the world – next to banking – and not a playing field for amateurs or politicians. In principle, it is up to the federal states to ban vaccinations and health protection measures. But states are usually guided by standards set by authoritative national institutions: the Centers for Disease Control and Prevention (CDC), the Food and Drug Administration (FDA), the Environmental Protection Agency (EPA), and the National Institutes of Health. While more than 60% of Republicans have little or no trust in these institutions, according to a recent article in the New England Journal of Medicine, Trump is likely to weaken these state institutions significantly, for example, by providing these authorities with less funding and staffing than before. And since some of these institutions – such as the CDC – are globally active organisations, these cuts could also have worldwide repercussions.

The revival of the ‘Most Favoured Nation’ policy in medicine pricing may also not benefit biotech/pharma stock performance, especially as the presidential candidate – who is typically positioned as business-friendly – has repeatedly criticised ‘Big Pharma’ in his election campaigns for high drug costs. Kennedy confirmed in a commentary in the Wall Street Journal that legislators should cap drug prices so that companies cannot charge Americans much more than Europeans.

This article, written by Peter Thilo Hassler (Sphene Capital), was originally published in European Biotechnology Magazine Winter 2024.