Replies to post #228455 on Biotech Values

[Biowatch]

It may depend on views about patent protection.

[DewDiligence]

As a biotech investor, are you concerned that pretty much every presidential candidate seems to have a plan to cut drug costs?

Yes, to some degree. However, major changes in the US prescription-drug business won’t happen without support from both houses of Congress and the President. Hence, any plan that actually gets enacted in the next few years is apt to be considerably more modest than the worst-case scenarios.

[lumpy9200]

As a biotech investor, are you concerned that pretty much every presidential candidate seems to have a plan to cut drug costs?

I completely agree with Dew's answer, and would also add that Presidential candidates have a lengthy history of running on campaign promises they don't push forward with, at least not in full. I believe Presidents know there's a slippery slope when it comes to mandating that drug prices be reduced heavily. Push hard and gain populist support, and then Pfizer says they'll cut $2 billion from the R&D budget. Add in the rest of the big pharmas, and you have tens of billions of dollars in R&D potentially getting cut, along with thousands of job losses. You'll have members of congress fighting to protect their constituencies from job loss and cities from lost tax revenue. For biotechs it's even worse. How do you spend a decade or more bringing a drug from a theory through clinical trials and hundreds of millions of dollars, and perhaps not be able to sell enough to make a profit because of a pre-set limit on the price you can charge? Big biotech cities could be hit hard (Boston, San Diego, etc), and politicians on both sides of the aisle will defend against that I believe. And of course no one wants to see a reduction in the fight to cure cancers, alzheimers and more. I'm not defending the current pricing of certain drugs, as there are examples that seem totally obscene. And I know prescriptions drugs aren't cable TV, where you can simply "go without" if you don't like the price. But politicians deciding what fair pricing should be without real inclusion of the drug companies in the discussion is a recipe for problems in my opinion, and I think they know it. Massive cutting of prescription drug costs is a great thing to campaign on, not so much to enact. If anything does change, I'd expect it to be far less impactful than the candidates are calling for. Then the President can claim a "win" but not at the expense of jobs, research, etc. All just my very humble opinion....