Trump presidency unlikely to ‘materially’ impact CROs

By Melissa Fassbender contact

- Last updated on GMT

(Image: iStock/ginosphotos)
(Image: iStock/ginosphotos)

Related tags: Contract research organizations, Clinical trial

Analysts suggest a Trump presidency won’t have a material impact on contract research organizations – though a shake-up in trade policy could complicate the larger, global pharmaceutical industry.

According to Garen Sarafian, an analyst at Citi Research, CROs are “unlikely to be materially impacted​,” however he said cancellation rates may see volatility.

Contract Research Organizations utilized by pharmaceutical manufacturers to assist throughout the clinical trial process should remain largely removed from the current political landscape and recent headlines​,” Sarafian said.

Nevertheless, analysts suggest pricing pressures and the resulting scrutiny of pharmaceutical manufacturers’ pipelines, may result in higher cancellation levels.

“There is also the possibility that CROs could be increasingly utilized in gathering evidence and datasets to demonstrate trial efficacy in larger trials, or harnessed in studies screening for successful drugs amongst a larger number of candidates​,” explained Sarafian.

Consequently, there exists a possibility of greater volatility but limited earnings over longer periods​.”

Ultimately, the ramifications of a Trump victory remain to be seen. As Sarafian noted, Trump has a limited track record and has made very few comments on healthcare – aside from his promises to repeal ObamaCare.

Trump has campaigned heavily on trade, however, and his anti-free trade stance could have a great effect on the pharma industry.

As Outsoucring-Pharma.com previously reported​, the TTIP (Transatlantic Trade and Investment Partnership), TPP (Trans-Pacific Partnership) and TPA (Trade Promotion Authority), while a source of debate in the market, are welcomed by generics manufacturers in spite of potential biosimilar patent extensions.

Conversely, as part of his proposed trade policy Trump has said​ he will announce the country’s withdrawal from the TTP. He has also said he in in favor of taxing imports – suggesting a 45% tariff on imports from China and 35% on goods shipped from Mexico.

In its statement on the outlook for the pharmaceuticals and healthcare sector, BMI research said, “The outcome of the US presidential election, with Donald Trump taking a surprising victory, is a mixed result for pharmaceutical companies​.”

“In a tougher medicine pricing environment, R&D-based firms with differentiated products with intellectual property protection have less to worry about than specialty medicine producers and generic drug firms. Restrictive formularies that exclude undifferentiated products are emerging as a key tool to lower pharmaceutical expenditure,” ​BMI Research explained.

There will be more calls for greater transparency in the industry, especially with prices, discounts, rebates, mark-up and intermediaries in the supply chain.”

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