What Obama means for pharma

By Nick Taylor

- Last updated on GMT

Related tags: George w. bush, Embryonic stem cell, Barack obama

Following Barack Obama’s victory in the race to the White House, in-PharmaTechnologist.com examines what this could mean for the pharmaceutical industry.

Obama laid out his some of his policies that will affect the pharmaceutical industry in Science Debate 2008, which took place in August and September.

Stem cell research is an area in which a seismic shift should be seen when the new administration takes office, with Obama promising to overhaul George W Bush’s policy of restricting funding.

Obama said: “I believe that the restrictions that President Bush has placed on funding of human embryonic stem cell research have handcuffed our scientists and hindered our ability to compete with other nations​.”

As well as lifting the ban Obama intends to establish a federally supported stem cell research programme. This forms part of a doubling of basic research budgets that Obama has said will occur over the next decade, with “increased support for high-risk, high-payoff research​”.

Although these reforms all carry significance, the approach Obama takes to the US Food and Drug Administration (FDA) may shape his legacy to pharmaceutical manufacturers.

Concrete policies as to how the FDA is to be reformed are thin on the ground, with a lot resting on who Obama appoints as the agency’s Commissioner.

Obama has said that senior management positions where decisions rely on science and technology advice will be filled on a non-partisan basis by people: “with strong science and technology backgrounds and unquestioned reputations for integrity and objectivity​.”

It is possible that Obama will make an appointment such as Steve Nissen or Bruce Psaty, who were outspoken on Avandia and Vioxx respectively, and usher in significant reforms at the FDA.

However, such reforms may upset more moderate stakeholders in the FDA, which could lead Obama to appoint a Commissioner more inclined to tweak than overhaul the agency.

Big pharma’s generic threat

An aspect of the FDA reforms will be to facilitate the more widespread use of generics, with Obama’s advisors saying the creation of an​approval pathway for follow-on biologics is a top priority.

Early in the Democratic primaries Obama spoke out against pharmaceutical companies: “explicitly paying generic drug makers not to enter the market so they can preserve their monopolies and keep charging Americans exorbitant prices for brand name products​.”

Obama has promised to put a stop to this practice and ensure that market power does not push up prices for consumers. This could potentially reduce the lifespan of a branded product, be it a biologic or small molecule.

Similarly, Obama is also looking to reform the patent application process, based on the belief that they are awarded too easily and that previous inventions are given insufficient attention during the approval process.

To counter this Obama proposes opening up the patent process to citizen review and creating a “gold-plated” patent, which would be less vulnerable to court challenge.

This proposal has been accused of being unfair because the more expensive and time consuming “gold-plated” approval process would favour large companies. However, this issue could be solved through the adoption of reduced fees for smaller companies.

The change we need?

Beyond these issues Obama has the prospect of reforming the healthcare system and laws governing direct-to-consumer advertising, both of which could have significant implications for pharma’s US operations.

However, implementing these changes could prove challenging despite the Democrats commanding majorities in the House and the Senate, as Bill Clinton discovered in 1994 when his healthcare plan was scuppered.

Obama campaigned with the slogan “one voice can change the world​”; whether it can pass reforms remains to be seen.

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