Posted February 11, 2017 by admin in articles

What Does the Trump Administration Mean For the Pharmaceutical Industry?


Exclusive article by Anne Foy at

The pharmaceutical industry is a popular media villain and an easy target for politicians and activists looking for someone to blame for our country’s myriad of health epidemics. As a new administration is announced, many within the pharmaceutical industry will begin bracing themselves for the fall out to follow. But what, exactly, does a Trump administration look like for the pharmaceutical industry? And what knock on effects of some of his policies can we expect to feel the impact of?

An End to Affordable Healthcare?

We already know that the Trump presidency will ring the death knoll for Medicaid in its current format, and that many people on lower incomes will now be attempting to secure the health insurance they need at prices they can afford.  From a purely financial point of view (without examining the political implications of this policy) this means we are likely to see an increase in demand for over the counter, prescription-free medications, as individuals on low incomes seek to self-medicate minor conditions rather than visit a doctor that they can’t afford. Trump has vowed not to cut medicare completely, but to instead make substantial changes to how that program looks and to what care individuals can receive at the Government’s expense. At the time of writing, there is no clear idea of what this new system will look like, what medications will be available within that system, and therefore how exactly it will effect specific arms of the pharmaceutical industry.

Unexpected Opposition

A Republican president in office is usually good news for those who make their living from the pharmaceutical industry. Republicans traditionally support the free market economy, and oppose price control within that market: many Pharma-bosses will have celebrated Trump’s triumph over Clinton as the one more likely to secure the long term health of their businesses. However, Trumps comments about the pharmaceutical industry just days after taking office are likely to have thrown that assumption into uncertainty when he said: “Our drug industry has been disastrous…They supply our drugs, but they don’t make them here. [The drug industry is] getting away with murder…And there’s very little bidding on drugs. We’re the largest buyer of drugs in the world, and yet we don’t bid properly. And were going to start bidding and were going to save billions of dollars over a period of time.”

A Devastating Blow for Overseas Manufacturers

For those companies that manage and manufacture their drugs overseas, this statement will be a devastating blow, but one that was no doubt expected, given Trump’s vocal opposition to American companies manufacturing their products overseas. There is a fear within the industry, that much like in the higher profile car market, the Trump adminstration will choose to place large tarifs in place for pharmaceutical companies that continue to manufacture their products overseas. What is likely to be more financially devastating is the news that Medicaid (in whatever format that takes once the administration has begun) will clearly be negotiating for their drug prices, and Trump has clearly set out a stall indicating that those negotiations will be intense.  Medicare is the biggest buyer of pharmaceuticals in the United States, and if they choose to negotiate prices, or set out lower price structures, it will be devastating for those companies that refuse to play ball and will cost those companies that do comply millions of dollars. This is not something that we have seen on a large scale before, with each individual provider negotiating on their own behalf up until this point.

As with many Trump policies in these early days, how this popularist policy will be implemented (or whether it can be implemented in practical terms) is yet to be seen, and certainly no lower level details have been laid out at this stage. But what we do know is that if Trump has set its sights on the pharmaceutical industry and has chosen it as one of the villains of his administration then the industry could well be in for a very difficult four years.

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