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It's inauguration day!
Today, Joe Biden will officially become the 46th president of the United States when he and Vice President-elect Kamala Harris take their oaths of office.
As Biden & Harris prepare for the next four years in office, we're taking a look at Life Sciences' future under their leadership.
We already know that Science will be a central theme of the new administration. "Listen to science" is one of the key statements in the Biden-Harris Build Back Better plan, a message both the new President and Vice-President reiterated just last weekend when introducing the new top scientific advisors in an online briefing. Biden vowed to restore "trust in science", saying, "our administration will lead with science and scientists, with a CDC, an NIH, that will be free, totally free from political influence, a surgeon general who is independent, an FDA whose decisions are based on science and science alone".
Echoing his statement, Harris said, "we are going to make sure the United States of America once again leads the way in science and innovation".
The Build Back Better plan covers four main issues: Covid19, Economic Recovery, Racial Equity, and Climate Change. Given these priorities, and a core focus on innovation, what can we expect when it comes to the future of Life Sciences?
It's anticipated that the new administration will not only spend more on research, development and innovation but will also introduce tougher regulations and take an active role in partnering with industries, all of which will have implications for Life Sciences.
As mentioned, COVID-19 is one of the prioritized areas in the Build Back Better plan; it's likely Covid-19 will continue to play a dominant role in the Life Sciences industry for the foreseeable future.
Initially, Biden-Harris will focus on a seven-point plan to combat the pandemic, which you can read in detail here. According to PwC research, these response plans are viewed as very positive for Life Sciences.
Longer-term, the focus will be on mitigating the effects of future pandemics. Part of that is likely to be reversing President Trump's decision to withdraw from the World Health Organization (WHO). But additionally, we predict that this will drive investment in vaccine development and associated therapeutic areas within the U.S. over the next decade.
The Affordable Care Act
In his manifesto, Biden committed to significantly reforming the Affordable Care Act (ACA), which he was closely involved in developing whilst Vice-President. He aims to increase coverage, give Americans more choice, and make the system much less complicated.
Part of his proposed ACA reforms includes creating a Medicare-like public option, available to everyone. It goes without saying that Life Sciences has a vested interest in the ACA and broader health insurance. Although ACA reforms are likely to cost drug and device makers, extending its coverage has a positive impact on Life Sciences. Simply put, if more people have more comprehensive insurance coverage, then there are more patients visiting doctors, driving up the demand for drugs, devices and diagnostics, subsequently increasing revenues. Pharmaceutical Technology have got more detail on the ACA reform implications here.
Along with reforms to the ACA, the Biden-Harris administration will push for lower drug prices. But this isn't a new agenda, over the last four years, Congress and the Trump administration have been working on policies to address drug prices and increase health care price transparency. Initiatives also supported by Biden are an international pricing index for Medicare drugs and drug importation. However the new administration will also propose legislation to allow the government to negotiate directly with manufacturers, and push policies that limit drug price increases to inflation across government payers.
However, against the backdrop of the pandemic, at a time where the Life Sciences industry has been instrumental in battling the virus, it’s difficult to demonise pharmaceutical companies over drug pricing. There is a level of positivity towards the sector that we haven’t seen in years and that means that controlling drug prices is likely to be a lower a priority for the new President. So although we expect the focus on drug prices to continue throughout the new administration, other health care issues will take priority.
There is no question that U.S. are a world leader in Life Sciences, but global competition is only intensifying. To combat this Biden has proposed major increases in biomedical research and development, and the creation of an Advanced Research Projects Agency for Health (ARPA-H).
Additionally, the Innovate in America plan commits $300-billion to Research and Development (R&D) and ‘Breakthrough Technologies’. The funding aims to 'unleash high-quality job creation in high-value manufacturing and technology,'.
AI has been identified as one of the key ‘breakthrough technologies’, and given the rise of AI in Life Sciences as well as the increasing importance of digital health, this funding will impact the Life Sciences and associated industries.
For more details on the the key issues, priorities and people shaping the life science policy and regulatory landscape in the U.S. over the next four years check out this upcoming webinar from the J.P. Morgan Healthcare Conference, in conjunction with Cooley.