By Rebecca Robbins, Christina Jewett, and Kate Kelly
Executives within the drug industry were optimistic that a second Trump administration would feature health policy leaders who would ease regulations and help foster growth in their sector.
However, certain nominees proposed by President-elect Donald Trump are creating unease among pharmaceutical executives, as reported from industry interviews.
For the role of health secretary, Trump appointed Robert F. Kennedy Jr., a long-time skeptic of vaccines without formal training in medicine or public health, who has accused pharmaceutical companies of “mass poisoning” the American populace.
Trump has selected Dr. Dave Weldon, a former Florida congressman known for questioning vaccine effectiveness and advocating for the transfer of most vaccine safety research away from the CDC, to lead the Centers for Disease Control and Prevention.
Also, Trump’s choice for running the Centers for Medicare and Medicaid Services, former TV host Dr. Mehmet Oz, has limited experience with overseeing a large governmental bureaucracy; the agency is responsible for health care programs affecting over 150 million Americans.
During Trump’s initial term, pharmaceutical executives mainly supported his health policy picks, as they were affiliated with the moderate faction of the Republican Party and possessed extensive experience, including roles at prominent drug companies.
John LaMattina, a former leading scientist at Pfizer and currently a senior partner at PureTech Health, which develops biotech startups, remarked about those officials, “Disagreement was possible, but they had a solid knowledge base and had seriously considered these matters.”
He further stated, “Now we are seeing individuals without any relevant background, which is concerning.”
The potential repercussions for Americans who depend on medications or for the collective immunity against diseases that are not currently widespread remain uncertain. Some officials in the new Trump administration seek to accelerate drug approvals, possibly flooding the market with drugs of dubious efficacy. Kennedy has oscillated between demanding more independent evaluations of existing vaccines and calling for fewer restrictions on unconventional and unproven treatment methods.
Kennedy has also tapped into a well of anger from both consumers and politicians, who have criticized drug companies for their inflated prices on specific medications while reaping substantial profits instead of prioritizing patient care.
By choosing such a vocal antagonist as Kennedy, the president-elect startled the industry, leading to a temporary drop in vaccine and biotech stock values.
And while Kennedy recently stated he would not take vaccines away from those who wish to receive them, even a slight decrease in vaccination rates could frighten investors and lead to hundreds of millions in lost revenue. The industry is also apprehensive that drug approvals could face delays should Kennedy follow through on threats to terminate drug regulators or if they resign en masse to avoid working under his administration.
“Initially, there was cautious optimism about Trump’s victory, which quickly transformed into anxiety regarding RFK Jr.,” expressed Brian Skorney, a drug industry analyst for the investment bank Baird.
Political action committees from drug companies funneled millions into campaign contributions for both Democrats and Republicans during this electoral cycle, with the industry’s lobbying organizations holding substantial sway over policy and legislation.
Senior pharmaceutical executives have been relatively silent regarding Trump’s health policy selections to avoid alienating those who will oversee them. Their lobbying organizations have publicly issued courteous statements indicating a desire to engage collaboratively with the new administration.
Officials in the drug industry have expressed numerous concerns about Kennedy, who did not respond to a request for comment for this article. They are particularly anxious that he may attempt to undermine childhood vaccination programs; one potential approach could involve him advocating for changes in government recommendations around immunizations.
Kennedy has also sought to abolish legal protections for vaccine manufacturers against lawsuits stemming from severe vaccine-related injuries — a shift that could dismantle an established compensation system and expose the industry to costly litigation.
The stakes seem highest for vaccine-producing companies. Approximately one-fifth of Merck’s revenue is derived from two vaccines that Kennedy has criticized: a vaccine for human papillomavirus that has prevented thousands of cancer cases and the immunizations children receive against measles, mumps, and rubella. (Merck opted not to comment.)
Vaccines account for about 3% of the total prescription drug revenues nationwide, as reported by IQVIA, a provider of industry data. With some exceptions, vaccines generally yield lower returns compared to profits generated by more expensive treatments for diseases such as cancer and arthritis.
Drug manufacturers are also worried about the potential impact of Kennedy at the Food and Drug Administration. They often criticize the agency for being excessively rigorous, yet their business model heavily relies on a thoroughly staffed FDA to eliminate potential competitors that do not satisfy its safety and effectiveness criteria.
Kennedy frequently denounces the FDA as “corrupt” and too closely aligned with the pharmaceutical industry. He has criticized the fees the agency charges drug and medical device manufacturers, which constitute about half of its $7.2 billion yearly budget.
It remains uncertain how Kennedy’s perspectives will align with those of Jim O’Neill, a Silicon Valley investor and former government official who would be his deputy if confirmed. O’Neill, who was a senior aide to billionaire Peter Thiel, has advocated for drug approvals to occur once safety is established, even before their effectiveness is confirmed. This approach goes significantly beyond the deregulation typically promoted by many pharmaceutical executives.
Karoline Leavitt, a spokesperson for Trump’s transition team who will serve as his press secretary, characterized the president-elect’s appointments as “exceptionally qualified” and indicative of “his commitment to prioritize America.”
While lawmakers from both parties often critique the drug industry for exorbitant pricing, Kennedy characterizes pharmaceutical companies in a much more severe manner.
In a prior interview, Kennedy labeled vaccine manufacturers as “the most corrupt companies globally” and “serial offenders.” He has perpetuated inaccuracies regarding the science underpinning several of the industry’s most pivotal products, alleging that vaccines induce autism and questioning whether HIV is the genuine cause of AIDS. He has embraced an increasingly popular belief that improvements in diet and lifestyle — rather than pharmaceutical interventions — will mend the ill. Referring to drug manufacturers, he stated on the social media platform X this year, “The sicker we become, the wealthier and more influential they are.”
Pharmaceutical representatives were relieved by Trump’s choice for FDA leadership, Dr. Martin Makary, who, despite having a contrarian outlook, aligns with the scientific consensus on vaccine safety and is not perceived as a threat to the existing system.
Drug companies are hopeful about having a supporter in Vivek Ramaswamy, who gained his fortune as a biotechnology executive and has been appointed to spearhead a government efficiency initiative alongside Elon Musk. Ramaswamy has voiced criticisms of what he labels regulatory obstacles that hinder new drug approvals.
Furthermore, O’Neill, proposed as the deputy health secretary, maintains connections with various biotech and medical technology firms, although his ties to major industry players are less established.
In anticipation of potential public criticisms and proposals that could undermine their profits, drug companies reportedly are reaching out to individuals close to Trump with hopes of swaying the incoming administration. They are also exploring new strategies to safeguard their interests against governmental actions they see as harmful.
For a long time, drug industry figures have viewed Trump as an unpredictable entity, equally capable of being an ally or an adversary.
In 2020, the Trump administration’s Operation Warp Speed collaborated closely with pharmaceutical companies and invested billions into the rapid production of highly effective COVID vaccines, ultimately saving numerous lives. Trump’s health secretary during the pandemic, Alex Azar, expressed admiration for their “collaboration with private sector partners” that year.
However, this year, Trump has said little about Operation Warp Speed.
With few exceptions, the drug industry has been experiencing a downturn following the pandemic’s peak, when it enjoyed an enhancement in its public standing, and investors eager for significant returns poured capital into pharmaceutical stocks.
Yet trust in vaccines and health institutions has diminished correspondingly as the biotech market has cooled. Among major COVID vaccine manufacturers, Moderna’s stock price has plummeted tenfold, and Pfizer’s stock value has halved since their peak levels in 2021. An index tracking smaller biotech stocks has dropped by nearly fifty percent.
Pharmaceutical executives still perceive possibilities to capitalize on Trump’s victory.
The industry anticipates Trump will move to replace Lina Khan, the chair of the Federal Trade Commission, whom he is expected to dismiss due to her assertive stance against large businesses, including pharmaceuticals.
The sector is also optimistic that Trump could aid in reversing its most significant policy loss in recent history. Following the enactment of the 2022 Inflation Reduction Act, President Joe Biden’s landmark legislation, Democratic lawmakers enabled Medicare to negotiate directly for the prices of select prescription drugs — adversely affecting manufacturers’ profits and raising the possibility of similar reductions in the commercial sector. Congressional Republicans have signaled intentions to repeal that negotiation initiative.
