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The Pulse of the Pharmaceutical Industry

The brave new world of healthcare in America: Trump’s impact

Written by: | | Dated: Tuesday, February 14th, 2017



By Robert Palmer, executive VP at JUICE Pharma Worldwide



The Coalition for Healthcare Communication (CHC) summit in Washington, D.C., in late November provided an interesting postmortem of the 2016 election, and a look into the crystal ball by some of our industry’s most knowledgeable leaders. Fast-forward to February 2017, and the crystal ball is still pretty cloudy.

The CHC is a nonprofit organization that serves as pharma’s advocate with the FDA and members of Congress as well as an industry think tank and educational resource. The main topic of discussion at the CHC summit was what President-Elect Trump would – or wouldn’t – do to alter the healthcare landscape as we know it.

As the Kaiser Family Foundation put it, “the election’s outcome will be a major determining factor in the country’s future healthcare policy.” Issues such as the likely repeal and possible replacement of the ACA, structural changes to Medicare and Medicaid, drug price controls and importation of cheaper drugs from overseas, and reproductive health hang in the balance – if one can separate Trump’s rhetoric from his actions.

As Salena Zito famously wrote in The Atlantic, the press takes Trump literally but not seriously; his supporters take him seriously, but not literally. That leaves us with a murky brew of tea leaves at this point.

John Kamp, the CHC’s executive director, put it succinctly in late January when I asked him for a post-inauguration comment: “We certainly have our hands full with the new Trump administration,” he said. “Taxes on marketing; drug approvals slowdown; off-label communication policy changes. We’re living in interesting, sometimes turbulent, times.”


The price of drugs

Sharon Callahan, CEO at TBWA\WorldHealth and CHC board chair, opened the summit with cautious optimism regarding one hot-button subject, the price of drugs. “The one candidate who didn’t say much about drug pricing will be the president of the United States. Maybe we can use this lack of noise to get our message out there – take a lesson from Trump and sell our brand.”

Later that morning, Mike McCaughan, Senior Editor at Prevision Policy and the RPM Report, agreed with Sharon.

But that was then, and now days within assuming office President Trump has plenty to say about drug prices. As reported in The New York Times three days after his inauguration, “Mr. Trump’s press secretary [has] reaffirmed that the issue would be a priority.”

A possible showdown could be triggered by a Trump proposal to force drug makers to bid for the right to sell their products to Medicare beneficiaries – an idea that has repeatedly failed to attract enough support in Congress, especially among Republicans.

Prevision Policy is a Washington-based firm specializing in tracking, accessing, and explaining regulatory and reimbursement policy to the biopharmaceutical industry. McCaughan said the drug pricing issue is not going away, but agreed that the industry “has a golden opportunity to make the message be about the value of medicines.”

The move to repeal or replace Obamacare
Pam Jenkins, president of Powell Tate/Weber Shandwick, a large Washington-based public relations and public policy firm, also spoke at the CHC summit and says “now there is a reason to go out there and get your voice heard.”

She then addressed the elephant in the room. “One thing is for sure,” she said. “After 50 attempts to repeal Obamacare, there will be a 51st attempt, but Trump has said he won’t rip healthcare from 20 million Americans.” But she added that Trump could use budget reconciliation to selectively strip out pieces of the program; budget reconciliation needs only 50 senate votes to pass, whereas repeal would require 60 votes.

Politically speaking, however, this is a tough one. According to an article published in the New England Journal of Medicine, only 38 percent of doctors who reported they voted for Trump are in favor of completely repealing the Affordable Care Act.

According to a Johns Hopkins School of Medicine survey, only 15 percent of general practitioners surveyed support a repeal of the ACA. And – contrary to what one might assume when listening to the news – only 26 percent of the general public wants the ACA repealed, according to the Kaiser Family Foundation.

Those who have benefited the most from the ACA earn $50,000 or less, which includes millions of working class whites.

Elimination of advertising dollars as an allowable business expense

Peter Kosmala, senior VP for government relations at the American Association of Advertising Agencies, had some sobering thoughts regarding reducing or eliminating pharma tax deductions for advertising expenses. An idea that has gained support in Congress over the last several years, such a move represents an existential threat to the business as we know it. Speaker of the House Paul Ryan is passionate about tax reform and has says everything is on the table.

“I think that we will see tax code reform,” Kosmala says. Making sure that advertising costs remain deductible has been a key focus of the CHC.


DTC — here to stay?

Kosmala predicted that conservative additions to the Supreme Court are likely to uphold commercial free speech. This bodes well for protecting DTC advertising, despite the fact that a variety of forces – from the AMA to numerous politicians – are gunning for DTC.

However, McCaughan says Trump’s vow to shake up the FDA is concerning – FDA changes to DTC advertising rules, while short of eliminating DTC, could disrupt the industry. “The biggest risk for pharma is that the FDA climate gets worse, and right now it’s the best FDA climate of all time,” McCaughan says. “When you are at the peak, gravity is not your friend.”

Kamp, however, says although change is coming to the FDA, there are only five political appointees at the agency. “For example,” he says, “OPDP head Tom Abrams is not a political appointee.”


The best defense is a good offense

Several speakers, starting with Callahan, emphasized how important it will be to emphasize the value proposition that pharma represents.

“I don’t think there are any easy answers here,” Callahan says. “We clearly need a narrative that’s easy to understand and we have an opportunity to create that.”

When asked how to describe the value of healthcare in a populist way – in other words, how to fight fire with fire – Jenkins says, “The hope for cures. Remind people of the power and the promise of research.”

And research costs money, a lot of it. In other words, pharma has a positive message and it’s our job to ensure that it is heard.  medadnews

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