After the world held its breath on Tuesday, November 8—awaiting the outcome of the U.S. presidential election—the resulting rippling effect has impacted a number of markets, the pharmaceutical industry included.
According to FirstWord Pharma, shares of the following European and Indian pharmaceutical companies rose with the announcement of the election of Donald Trump:
- Novo Nordisk: 6.5 percent increase
- Roche: 5 percent increase
- Sanofi: 3 percent increase
- Shire: 5 percent increase
- Bayer: 3 percent increase
- Hikma Pharmaceuticals: 7 percent increase
AstraZeneca, GlaxoSmithKline, and Novartis’s shares were also reported to have risen on Wednesday.
“BNP Paribas analysts noted that Trump’s election is ‘a positive for the (pharmaceuticals) sector, with the bulk of industry hostile legislation now off the agenda,'” FirstWord Pharma reports.
However, not everyone shares such an optimistic outlook for one of the world’s largest pharmaceutical markets.
The potential drug pricing mandates may seem like a thing of the past with Republicans having control of Congress, but some experts say that not only is the Reforming the Affordable Care Act (ACA) expected to be a “priority of the new Congress,” but drug pricing regulation “can be expected to be a piece of that reform.”
“Trump’s position is identical to Clinton’s—including price as another criterion to use in negotiations,” Terry Haines, Evercore ISI analyst, told investors.
Furthermore, legislation isn’t strictly about Trump’s agenda or intentions, as Congress writes the laws (and not the president).
According to Fierce Biotech: “Jefferies analysts said U.S. pricing pressure and political reform ‘would remain a concern,’ but Trump’s win would be a relief for investors worried about a sea change in the U.S. system, which could have seen greater price controls from a Clinton administration.”
Beyond drug pricing regulations, global and internationally-based pharmaceutical companies have expressed concerns as to the potential reality of import tariffs and a ban on certain immigrant groups. These changes, which Trump spoke about during his campaign, would have impacts beyond the U.S. borders.
Fierce Pharma, in their article titled “UPDATED: Pharma loves free trade. How will it get along with a protectionist President Trump?'” said:
In January, Trump told a crowd of 1,000 people in Farmington, NH, that Medicare could save $300 billion a year by negotiating discounts. “We don’t do it,” Trump said. “Why? Because of the drug companies.”
Trump favors another cost-saving move that has repeatedly failed in Congress, and could conceivably include it in ACA reform, too: drug reimportation, which would allow Americans to buy their prescription meds from other countries where prices are lower. Drugmakers are set against reimportation in the U.S.; after all, their sales have suffered from similar parallel trade within the EU.
Lead image photo credit: Gage Skidmore.
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