This November, the biotech industry faces an awkward decision: Donald Trump, whose policy stances have proven unpredictable; or Hillary Clinton, who can scythe drug company stock prices with a single tweet.

But both candidates agree on one thing: Drugs are too expensive. So whatever the outcome, biotech is preparing for more scrutiny on how it makes its money.

“I actually don’t think it matters who gets elected. Pricing is in the crosshairs,” Mason Tenaglia, vice president at health data company QuintilesIMS, said at a STAT panel discussion Thursday at Biotech Week Boston. “The biggest thing that’s going to happen is there will be more transparency.”

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As it stands, the true cost of therapies remains somewhat inscrutable to the public. Drug makers set a list price, but a convoluted process of negotiations with insurers, rebates to benefits managers, and deals with wholesalers obscure the total cost.

And there’s widespread public support for changing that. About 8 in 10 Americans agree that drugs are too expensive, according to a Kaiser Family Foundation survey released last month, and roughly 86 percent believe pharmaceutical companies should be required to disclose more information about how prices are set.

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The fear among drug makers is that the next administration will constrain pricing in a way that makes it difficult to get a return on research investments. The United States is home to “the most robust biopharmaceutical industry in the world,” said Dr. David Meeker, head of Sanofi Genzyme. He said the industry depends on a model in which drug companies are rewarded for taking scientific risks.

“You have to ask, what is the net goal of transparency?” Meeker said. “Is it to allow a more competitive environment? Is it to allow better decision-making? Or is it to ultimately provide information that will lead to price control? I think that’s the slippery slope that we need to be extremely cognizant of.”

Trump has disclosed few specifics on how he would rein in drug pricing, but he has endorsed the idea of letting Medicare negotiate with manufacturers on its own. As recently as September, he promoted the idea of allowing patients to import drugs from nations where costs are lower, but that proposal has since disappeared from his website’s section on health policy.

Clinton’s plans are much more detailed and include capping out-of-pocket spending at $250 a month, allowing Medicare to negotiate with manufacturers, and penalizing companies that raise the prices of old medications.

But whether she would be able to actualize those goals as president remains in doubt. The Affordable Care Act has endured a series of setbacks in recent months, with insurers planning to pull out of the law’s marketplaces and seeking higher premiums. Rescuing the law would require Clinton to marshal significant resources, and that effort may come at the cost of policy changes aimed more squarely at pharma.

“The question for her, honestly, will be: Where does she choose to devote her energy and political capital?” said Kathleen Weldon Tregoning, senior vice president of corporate affairs at Biogen.

Clinton and the political committees supporting her candidacy have accepted more than $13 million from donors in the pharmaceutical and health products industries, according to the Center for Responsive Politics. Trump and the committees supporting him have taken orders of magnitude less — just $110,000, according to the center, which last updated the data in late September.

No matter who is elected, Meeker said, Congress seems likely to seize on the issue of pricing transparency.

And thus for biotech, preparing for 2017 is not a matter of picking between Trump and Clinton. “It’s a recognition that we are in a moment of change,” Meeker said.

  • The problem is that the big pharmaceutical companies don’t invest that much in research anymore. They just let the small biotech companies develop drugs and then buy them.

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