By Josh Nathan-Kazis
Twenty-four hours after Donald Trump announced he would seek to install Robert F. Kennedy Jr. as Secretary of the Department of Health and Human Services, the response from the drug industry has remained remarkably measured.
Kennedy, an avowed foe of drugmakers, suggested last year in an interview that the pharmaceutical industry is "a criminal enterprise, and was formerly a leader of the most influential antivaccine group in the country.
While public-health experts denounced the choice on Friday, and investors fled the biopharma sector, the industry itself was far more muted in its response to Kennedy's nomination for the HHS job.
The industry's two main lobbying groups, PhRMA and the Biotechnology Innovation Organization, or BIO, both put out low-key statements saying they looked forward to working with the incoming Trump administration.
Neither statement read as a call for Senators to block Kennedy's nomination.
It may be that the industry groups don't want to directly antagonize a man who will quite likely lead a department with enormous power over the fates of their members. Or it may be that they see room for a give-and-take with the Trump administration and an opportunity to roll back Biden-era reforms like the Medicare drug-price negotiation program.
"Recent events signal there will be opportunity to make progress on industry priorities that have not gained traction in previous administrations," one industry executive told Barron's.
What exactly pharma thinks it can get out of Trump is unclear. But in his statement on Kennedy's nomination late Thursday, PhRMA's president and CEO Stephen Ubl slipped in a pitch for changes to the Inflation Reduction Act, the law President Biden signed in 2022 that, among other things, created the drug-price negotiation program that pharma companies have sought to kill for years.
"We must fix the flaws in the so-called Inflation Reduction Act that are undermining our world-leading innovation ecosystem," Ubl wrote.
BIO president & CEO John Crowley, in his statement, said the U.S. is served by leadership that "respects and advances science, nutrition, and medicine," though steered clear of any direct criticism of Kennedy. He closed by saying that the industry looks forward to working with President Trump and his administration.
The news that Trump will seek Senate confirmation for Kennedy to lead HHS is fresh and unexpected, and the industry's tone and approach could change in the months ahead.
In the meantime, the tempered industry response appeared out of step with the mood on Wall Street.
"There is no question that if he is confirmed he makes nearly all of healthcare more challenging to invest in," wrote Chris Meekins, Raymond James' Washington healthcare policy analyst, in an email to Barron's late Thursday.
The SPDR S&P Biotech exchange-traded fund, which tracks biotech stocks, was down nearly 5% on Friday, while shares of major vaccine makers also fell. Pfizer was down 4.5% late Friday afternoon, while Moderna was down 7.1%.
Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
November 15, 2024 17:03 ET (22:03 GMT)
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