Drug Industry May Face Less Scrutiny Under Trump

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By Dana A. Elfin

Nov. 10 — The bull's-eye may finally be off the drug industry’s back.

President-elect Donald Trump and the new Congress aren’t likely to be focused on drug pricing issues, life sciences lawyers told Bloomberg BNA.

“Life sciences clients, in particular, big pharma, are generally pleased” that Hillary Clinton wasn’t elected, attorney Don Pelto told Bloomberg BNA Nov. 10. Pelto is an intellectual property and patent litigation attorney at Sheppard Mullin Richter & Hampton LLP, Washington.

“It’s fair to say that Secretary Clinton’s defeat will take the focus off pharmaceutical prices in the short term,” John W. Treece, with Sidley & Austin LLP in Chicago, said. Treece, a practice area team leader in Sidley’s antitrust and competition practice, represents several pharmaceutical company clients.

New Leader at FDA?

The FDA leadership is also likely in for a shake-up, too, life sciences lawyers said.

FDA Commissioner Robert Califf may be on his way out, said David L. Rosen, a life sciences lawyer with Foley & Lardner LLP in Washington. Trump is probably going to want to start with a clean slate across the board, said Rosen, who previously worked at the FDA.

Significant staff turnover is also likely at the FDA, particularly in key leadership positions, according to Gregory H. Levine, co-chair of Ropes & Gray LLP’s Life Sciences practice group in Washington.

Industry’s not likely to take a favorable view of changes at the FDA because businesses like certainty and they are used to dealing with the current players, David A. Manspeizer said. Manspeizer, an intellectual property lawyer at Morrison & Foerster LLP’s New York office, was previously vice president of intellectual property and associate general counsel at pharmaceutical and biotechnology company Wyeth.


Short-term, the new administration won’t be looking to restrain drug prices, Mark Barnes, of Ropes & Gray LLP in Boston, said. Barnes advises biopharma and medical device companies.

The pharmaceutical industry’s pricing practices were a centerpiece of Clinton’s campaign but Trump didn’t talk a lot about the drug pricing issue during the campaign, Rosen said.

There will be probably be less discussion of drug pricing issues than before, Rosen said. “We’re probably in for a bit of deregulation.”

Early Signals

But the pharmaceutical industry shouldn’t let down its guard just yet.

“It remains an unknown how Donald Trump will treat the pharma industry,” Pelto said.

“Savvy investors and pharma companies are more circumspect,” Barnes said, “realizing that Trump is not like other Republicans, and may not be fully aligned with pharma industry interests.”

There is significant uncertainty in the long term, Treece said.

“The only reliable prediction is uncertainty,” Jake M. Holdreith, of Robins Kaplan LLP in Minneapolis, said. Holdreith leads the firm’s Health and Life Sciences industry group practice.

Ty E. Howard, of Bradley Arant Boult & Cummings LLP in Nashville, agreed. “So much of the campaign and the Trump candidacy was unconventional that it is hard for businesses to predict what’s next,” he said. Howard is chair of Bradley’s Government Enforcement and Investigations group and represents clients in health care as well as other industries.

Trade Renegotiation Worries Industry

Trump’s tough stance on trade issues with China and other countries could also have negative repercussions for the life sciences industry, according to Levine, of Ropes & Gray.

Potential changes in trade policy cut across many industries, Howard said. Those changes have broader implications for the economy as a whole, including the pharmaceutical, biotechnology and device sectors, he said.

“Industry will be concerned about Trump reopening trade agreements and the possibility of renegotiating those agreements,” Manspeizer said.

Could Drug Reimportation Resurface?

There’s also the possibility that the issue of whether cheaper drugs can be legally imported into the U.S. could resurface, Manspeizer said.

Trump has made “vague statements” on importation and the reimportation of drugs from Canada, he said. Trump has also made statements about opening up Medicare Part D, which covers prescription drugs, to price negotiation, Manspeizer said.

The lack of “meat on the bones” on any of Trump’s statements makes it difficult to predict what, if anything, could move forward in these areas, he said.

Drug Approvals Could Be Quicker

But the new political leadership contains plenty of potential upsides for the life sciences industry, too.

Expediting drug approvals and reducing regulatory burdens are among those upsides, Levine said.

“There is some speculation that the FDA approval process may become faster and may allow more and quicker approvals,” Holdreith said.

Speeding drug approvals, particularly in areas where treatment alternatives are lacking, may move ahead in 2017, Rosen agreed.

Information Sharing May Increase

Drug and device makers may also get a freer hand to share information with health care providers about unapproved uses of their products.

Currently, FDA regulations prohibit manufacturers from sharing information about uses of their products that the agency hasn’t approved. The drug industry has been litigating over this issue seeking to lessen these restrictions.

A more conservative Supreme Court is likely to continue the trend of extending First Amendment protections to commercial speech including manufacturers’ ability to disseminate information about unapproved or off-label uses of products, Levine said.

—With assistance from John T. Aquino.

To contact the reporter on this story: Dana A. Elfin in Washington at delfin@bna.com

To contact the editor responsible for this story: Brian Broderick at bbroderick@bna.com

Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.

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