Donald Trump’s victory in the U.S. presidential election Tuesday means change is coming for federal health agencies and the industries they regulate. It’s just not quite clear yet how dramatic that change might be.
Trump has pledged to “make America healthy again” and, in embracing Robert F. Kennedy Jr., a well-known critic of vaccines and pharmaceutical companies, has signaled such a campaign could feature unorthodox or disruptive ideas.
“I'm going to let him go wild on health,” Trump said in a campaign speech in New York last month. “I'm going to let him go wild on the food. I'm going to let him go wild on medicines.”
The potential for Kennedy to have a role overseeing or advising on healthcare policy is focusing the drug industry’s attention on how Trump might treat the Food and Drug Administration.
In his first term, Trump picked more traditional choices — Scott Gottlieb and then Stephen Hahn — as his FDA commissioners. And while he and his administration leaned on the agency to make decisions on unproven COVID-19 treatments like hydroxychloroquine, they also put “Operation Warp Speed” into action, accelerating the development of safe and effective coronavirus vaccines.
“I think a Trump administration will pay a lot of attention to the FDA,” said Holly Fernandez Lynch, an associate professor of medical ethics and health policy at the University of Pennsylvania. “Obviously, the FDA was high on President Trump’s radar screen last time around because of COVID.”
A drug policy agenda influenced by Kennedy in Trump’s second term may look different. Speaking with NPR Tuesday, Kennedy said he’s been instructed to rid regulatory agencies of “corruption,” return them to evidence-based science and end what he’s termed the chronic disease epidemic. He’s also previously said on X that he hopes to promote what some physicians consider fringe areas of medical science like stem cell injections and “nutraceuticals.”
“If you work for the FDA and are part of this corrupt system, I have two messages for you: 1. Preserve your records, and 2. Pack your bags,” Kennedy wrote.
His focus on undoing what he deems to be regulatory suppression could have an ally in Trump. Fernandez Lynch noted Trump’s recent emphasis on the “right to try” legislation he signed into law in 2018 is indicative of Trump’s view of the agency.
“The fact that he keeps bringing it up suggests that he continues to think it's a big deal,” said Fernandez Lynch. “I do think that it gives a lot of insight into his mindset around the value of FDA or its perceived lack of value [to him].”
“Keeping that mindset in frame suggests he would push FDA to go even deeper [in promoting] the flexibility they’re already exerting,” she said.
Still, analysts expect Kennedy would have difficulty winning Senate confirmation for roles leading the FDA or its parent agency, the Department of Health and Human Services. In the NPR interview, Kennedy said it’s not yet decided what his role might be. Other candidates might be favored for the FDA and for HHS.
“None of us know who's going to be appointed,” said Jeffrey Jonas, the former CEO of Sage Therapeutics and currently a partner at Cure Ventures. “So the question is going to be: Is [Kennedy] going to be the only voice in the room? Or is he going to be brought in to represent a particular point of view on health and drugs?”
“The drug industry is arguably the most highly regulated industry in the world. It's really not a job for amateurs or politicians,” Jonas added. “We have to hope that this administration, and every administration, appoints people who are familiar with the science in an apolitical manner.”
While biotech leaders may view Kennedy with some trepidation, they’re more optimistic about what a Trump administration might mean for the federal government’s scrutiny of mergers and acquisitions.
Pharmaceutical company dealmaking plays an important role within biotech. Acquisitions generate returns for biotech investors and recycles capital as well as talent into startups working on new ideas. They can also, some argue, increase companies’ market power and snuff out competitors.
Industry M&A has been a particular target of the Federal Trade Commission under current chair Lina Khan, a Biden administration appointee. The agency scrutinized Amgen’s $28 billion buy of Horizon Pharmaceuticals, tightened merger guidelines and, most worryingly for many in biotech, took the unusual step of blocking an early-stage licensing deal.
“With regard to FTC, there’s a good chance that changing leadership there will be a positive for biotech,” Daphne Zohar, the CEO of Seaport Therapeutics and previously head of PureTech Health, wrote in an email.
Jonas, of Cure, holds a similar view. “For many of us, our view is the FTC has been very arbitrary in its application of the rules and regulations,” he said. “I think a change at that office will be a benefit to the investment community, to the biotech community and, frankly, for patients and innovation.”
Khan's current term ends in 2028. But the president gets to designate the FTC chair, and Trump will have an opportunity to replace Commissioner Rebecca Kelly Slaughter, whose term will end in May 2025.
Beyond personnel, a Trump administration could change how the federal government approaches drug pricing. In his first term, Trump floated a number of policies to cut drug costs that either failed to advance or were thwarted by legal action. Among them was a “favored nations” policy designed to link Medicare reimbursements to prices paid abroad. That plan is “one way to control prices on a macro level,” said Jonas, “so that'll be one area people will be watching."
However, he appeared to back away from that idea in recent months, with his campaign telling Stat in October that there is "no push" to revive the policy.
Since Trump left office, the Biden administration has also enacted the Inflation Reduction Act, which for the first time granted Medicare the authority to negotiate drug prices. It’s unclear how the incoming administration might adjust implementation of the law.
"The range of possible outcomes for the industry on drug pricing policy in a second Trump term is quite substantial, and the outlook for the new Medicare drug price negotiation program is perhaps the best case in point," wrote Rick Weissenstein, an analyst at Cowen, in a client note.
A second Trump term could also rekindle scrutiny of U.S. firms’ ties to Chinese companies. His administration may additionally seek to limit the availability of the abortion pill mifepristone, which the FDA under the Biden administration has sought to defend.
“I expect a ‘Musk-ian’ deregulation of the industry, which could offer some positive elements in our efforts to bring medicines to patients as long as we maintain strong scientific standards,” said John Maraganore, the former CEO of Alnylam Pharmaceuticals and now a board member of several biotechs.
