DTC in Perspective: Election 2016 and DTC


It is finally over. We have a new President elect. We have a relatively unchanged Senate and House. What does this mean for the DTC Industry? Both candidates were critical of the drug companies during their campaign. President-elect Trump has not said anything about DTC, but he has called for price negotiations with drug companies for Medicare. That would greatly affect drug company profit margins and result in R&D and marketing cuts.

My fear is that there will be lots of bi-partisan support for negotiating price. It may be too hard to say no from a Congress anxious to show its populist bent. The drug lobby may be able to convince Trump that cutting their prices through government negotiations has negative consequences on R&D investment. I doubt Mr. Trump has given the drug business much thought beyond his general comment that billions can be saved through tough negotiations.

Bob Ehrlich
“DTC will survive any changes instituted by President Trump.”
-Bob Ehrlich

The good news for drug companies is there will be a move towards less regulation. I also expect an FDA that is quicker to act on drug approvals. Clearly Trump will want both drug companies and device makers to get cost effective drugs out to the marketplace faster.

Now what about Obamacare? It has proven to be a difficult program to afford for many Americans. Despite the high cost, most of those insured under it will still want access to insurance. Trump will push for more free market options including opening up the insurance market nationally. He will likely have a subsidized program for Americans with pre-existing conditions.

DTC will survive any changes instituted by President Trump. While prices may be pressured to stay lower, I do not think Trump and his business advisors want to kill the drug industry through punitive regulations. Trump is not Bernie Sanders who wanted to punish “evil” drug companies. I am hopeful that a free market oriented approach to health care will be good for America. Opportunities will be plentiful for companies promoting evidence based approaches to delivering care more efficiently.

The Republican Senate and House should be relatively drug company friendly as long as they are not seeing sharply rising prices. The drug companies must exercise some restraint by keeping price increases related to inflation or other justifiable costs. A Trump presidency is highly unpredictable so I expect drug makers to face some uncertainty in the short term.


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