The “TRUMP” Impact on Pharma Over the Next 4 years
The elections are over.
While it’s time we all take a deep breath and relax, a lot of people in Pharma are wondering what the next four years will bring to the industry. Ed Miseta, chief editor of Clinical Leader, shared his thoughts on how this historical election will affect Pharma. He sees the election as a hopeful sign in these areas:
Reversing Our Declining Level of Economic Freedom
The new administration may lessen restraints on economic freedom. According to OECD (Organization of Economic Cooperation and Development), the US has dropped from its number one position of countries with economic freedom to 16th place in 2016. The index measures several aspects of economic freedom, including trade, regulation, sound money, size of government, and more. Miseta emphasized the fall of the U.S. was most precipitous in two areas: legal system and property rights, and freedom to trade internationally. Since drug development is a global endeavor requiring the legal system (most notably patents and IP protection), we can scarcely afford for this drop to continue.
Corporate Tax reform may help
The US has the dubious distinction of having one of the highest corporate tax rates in the world at 35%. As Miseta points out, that is not good for Pharma. Corporations (including Pharma) have placed their headquarters overseas and left profits abroad. Corporate tax reform would reverse this trend.
Government regulations could be lessened
There were about 176,000 people engaged in regulatory activities in the US in 2000. Today, that number has exploded to 279,000! A poll of Pharma CFO’s indicated they thought burdensome regulation to be the number two threat to business. Onerous regulations faced by companies were recognized as the source of ongoing cost pressures. Only a threat of recession posed a greater threat.
In the end, It’s a wait-and-see game regarding whether or not a Trump administration will do anything to reverse these trends. Let’s hope for the best!
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