Why Donald Trump’s Anti-Trade Stance Worries Drug Companies

This piece originally appeared on STATnews.com.

WASHINGTON — The drug industry is quietly troubled over Donald Trump’s tough talk on trade.

The Republican presidential nominee has promised to aggressively renegotiate America’s trade deals — and to tear them up if need be. Those pledges are now rankling a biopharmaceutical sector that depends heavily on the deals to protect their intellectual property and, by extension, their entire business model.

Provisions in the deals typically require participating nations to adhere to patent protections similar to those in the United States, to give companies relief if there is a delay in granting a patent, and to keep their clinical data confidential.

“These trade deals are lifeblood for the protections of the intellectual property that pharma maintains,” said Dan Mendelson, president of Avalere Health, a consulting firm that works with life-sciences companies. “When you start going in and saying we’re going to rip these up, you upset the balance.”

Trump isn’t directly attacking the drug companies, as have Hillary Clinton and other Democrats on the campaign trail. But the industry is nonetheless concerned about his stance on trade, one of the issues where he seems substantively engaged.

Ira Loss, executive vice president and senior health care analyst at Washington Analysis, a consulting firm that follows the drug industry and regulatory policy, said in an email that drug makers are “certainly not happy about [Trump’s] plans to undo trade deals that have advantaged the industry.”

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Others inside the industry, who requested anonymity to speak candidly, said they worry because Trump hasn’t specified how he would like to see US trade deals changed.

The United States is a party to dozens of trade agreements with individual countries, as well as broader pacts like the North American Free Trade Agreement and the Trans-Pacific Partnership, the latter of which has not yet been ratified by Congress. Trump has directed much of his criticism at NAFTA and TPP specifically.

Adding to the industry’s uneasiness is the promise it sees in developing nations as emerging new markets that will help sustain their business. Last year, IMS Health estimated that those countries would account for nearly half of the growth in global drug spending in 2018.

That makes free trade agreements and their accompanying protections all the more important for pharma.

“If the intent of it is to say trade agreements need to do a better job of ensuring US industries are not ripped off and taken advantage of by foreigners — which is kind of the way that Trump puts it — then arguably that’s not bad,” one industry official said. “But what I think it really means is these people just aren’t in favor of trade agreements.”

The Trump campaign isn’t providing any clarity for now. Two campaign aides did not respond to multiple requests for comment on the issue.

Despite its disquiet, the drug industry hasn’t been publicly opposing Trump on the trade issue. Several lobbyists demurred when asked about it, and the industry groups in Washington declined to comment on the record.

That’s another part of the Trump riddle that the entire health care apparatus in Washington is trying to solve: How openly should they challenge a candidate hardwired for controversy and inflammatory rhetoric?

Trade is a prime example. The industry feels strongly about it, but fears that going toe to toe with Trump would “inflame the beast,” as Mendelson put it.

“They really don’t know just how threatening this would be if he were president,” he said. “Every health care group in Washington is feeling very ginger about picking its battles. If you criticize him, you make yourself the subject of his ire.”