Donald J. Trump is POTUS

Initial reactions of the stock market to Donald Trump’s victory in the US Presidential Elections is one of joy as witnessed by the jump in share prices. This is obviously a very unmuted reaction to the settling down of the anti-pharma rhetoric offered by Hillary Clinton. While investor sentiment is obvious, what I find surprising is that the industry lobby bet more on Hillary going into the White House than Trump. Despite all the recent anti-pharma rhetoric from her, they still preferred the staid Democrat (by funding her campaign) over the wildly unpredictable Republican.

This might have been because in his manifesto, Trump spoke little of drug pricing but more about importing medicines to reduce their cost to American citizens (“Allowing consumers access to imported, safe and dependable drugs from overseas will bring more options to consumers”). How he intends to increase medicine imports while curtailing international trade will be interesting to watch. He also spoke of following free market principles to broaden healthcare access, make healthcare more affordable and improve the quality of the care available to all Americans.

So, does this mean that he will loosen up IP laws, make it easier for generic companies to manufacture on American soil (or encourage drug imports despite his claimed abhorrence for trade) and increase competition in the sector thereby bringing down prices of healthcare in general and medicines in particular? This seems plausible as a solution that he hasn’t yet explicitly offered, while promising to do away with the Affordable Care Act ‘on day one’. If he can pull that off, he just might go down in history as a great President.

If Trump really backs up his rhetoric with action then it indeed augurs well for the Indian pharma industry which stands to gain the most. Also, since Big Pharma has not exactly backed him so far, he might take a more serious look at easing up imports to tighten the screws on them.

The critical thing that I will look out for is 1) the stand he takes on IP laws and 2) easing up local manufacturing for pharma. On the first point, his view on IP will be particularly interesting since he vocally opposed the TPP and TTIP – two of President Obama’s biggest attempts to create a near universal acceptance of US IP law. On the second point, although quite unlikely, if he makes local manufacturing easy, Indian companies can make a windfall profit given that they are more comfortable with FDA procedures and requirements than they were a few years ago.

Overall it does seem net positive for Indian pharma unless Trump’s famous unpredictability comes in the way.

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