What Should the Industry Expect from the Trump Administration?

Roman Columns Photo

On the second day of Biotech Showcase we examined what the biotech industry should expect from the Trump Administration with the help of our friends at Hogan Lovells. Over the course of the luncheon plenary and two afternoon workshops panelists discussed what lies ahead for the Affordable Care Act, the FDA and CMS.

Repeal or Replace?

When it comes to the fate of the signature program of the Obama Administration, the Affordable Care Act, our panelists were skeptical that the Trump team and the Republican Congress will be able to make good on their promise to repeal the Act and replace it with ‘something much better.’

Greg Simon, formerly Executive Director of the White House Cancer Moonshot Task Force, quipped, “You can’t replace reality with a bumper sticker,” underscoring the fact that the Republicans haven’t put forth any details on an alternative.

As Ken Choe, a partner at Hogan Lovells explained, “Lots of balancing of interests went into the ACA that will make it hard to unwind.” For example, as Liz Fowler, Vice President of Global Health Policy for Johnson & Johnson pointed out, ACA included a ‘drug company tax’ that was levied against biopharmaceutical firms in exchange for the promise that more patients would be brought into the health care system through greater access. If the ACA is repealed, those companies may, rightly, want a refund.

Another complicating factor is the fact that the biosimilars regulatory pathway is part of the ACA. If that law is repealed, new legislation will be required to restore the pathway.

As to what a replacement program might include, Dan Todd, Principal at Todd Strategy, said that while details are unclear, it is likely it will include high risk pools to cover patients with existing conditions and advanceable tax credits in place of subsidies.

Wither the FDA?

While many names have been mooted as potential FDA commissioners, (including Joseph Gulfo, Executive Director of the Lewis Center for Healthcare Policy and Technology, who moderated our FDA workshop), President Trump has not yet produced a nominee. As a result, it’s hard to speculate what direction the agency might take, however, our panelists did their best to comment on the rumors and speculation that have been making the rounds.

Jane Axelrad, Principal of Axelrad Solutions LLC, who previously served as Associate Director for Policy at the Center for Drug Evaluation, noted that there are fewer than five political appointees at the FDA. The majority of the agency staff are civilian employees who have been with the agency through several administrations. So a change in administration does not necessarily spell wholesale change at the FDA.

Jane and other panelists expressed more concern about the impact of the government hiring freeze on the agency which has been notoriously hard to staff – particularly in light of the fact that many agency staff may take this change in administrations as an opportunity to retire.

As Senator Norm Coleman, now Of Counsel at Hogan Lovells, pointed out, “It is likely the administration will push the agency farther than it wants to go.” Jane agreed, saying “Staff will resist any push to undermine the rigor of the drug approval process until they are overturned up the line.”

The panelists dismissed the idea that has been floated that the FDA should be reworked to focus reviews on safety and not efficacy. It was noted that payers would not be willing to reimburse drugs without proven efficacy making the idea a non-starter.

The Fate of Other HC Initiatives

As Jane pointed out, many of the health care reforms that are in process are already enshrined in the 21st Century Cures Act, signed into law in November by President Obama. Among other things, this sweeping legislation covers the adoption of Electronic Health Records (EHRs), patient-focused drug development, the use of Real World Evidence (RWE) and the Cancer Moonshot.

In fact, Greg Simon explained that the change of administrations is having virtually no effect on the Cancer Moonshot, explaining “It’s not important if the program is officed in the White House.”

Prognosis for the Next Four Years

Summing up the panelists prognosis for the next four years, Julie Gerberding, Executive Vice President and Chief Patient Officer for Merck, explained, “The government is designed for stability.” None of our panelists expect that the new administration will be able to accomplish the radical reforms proposed on the campaign trail.

The biopharmaceutical industry should, as Greg Simon advised, “Go about your business and continue to try to do the best you can” and hope the new administration chooses “neglect” when it comes to our industry.