Medtech industry looks upon Trump presidency positively, but many questions remain

While the medical technology industry’s C suite seemed to be banking—literally—on Hillary Clinton winning the election, the readers of sister brand Qmed, who tend to be in the medical device engineering and design trenches, think that President-elect Donald Trump will be “good for the industry,” or, at least, will do no harm.

In “Medtech’s Choice for President,” Qmed Senior Editor Chris Newmarker reported on the amount of money that Trump and Clinton received from the medical device industry. That race wasn’t even close. “Out of the more than $8 million given by the medical supplies industry to U.S. political candidates and causes in 2016, $264,827 went to Clinton, according to data compiled by the Center for Responsive Politics. Trump only received $43,148,” writes Newmarker.

Among the medtech rank and file—and perhaps the C suite, as well, since they might have been putting their money behind the likely winner, and not necessarily their preferred candidate—there is little anxiety about Trump's win. Qmed conducted a survey right after the election, asking readers how a Trump presidency would affect the medtech industry. Forty-six percent said it would be good for the industry and 16% said that it would not have much of an impact. Only 23% thought it would have a negative effect. Fifteen percent said that they didn’t know what effect it would have, which, of course, is the correct response. While Trump has begun to flesh out some of the bullet points from his campaign, uncertainty and ambiguity remain the words of the day. But here is some of what we do know.

"Something terrific" comes into a little sharper focus

Trump posted a brief outline of his healthcare plan on his website yesterday. The description went beyond repealing and replacing Obamacare with “something terrific,” if just barely.

“The brief 310-word plan gives few details about how Trump will replace the Affordable Care Act [aka Obamacare], except that it would include health savings accounts and an ability for insurers to sell coverage across state lines,” writes Bloomberg. Regarding pre-existing conditions, the website states that high-risk pools—state insurance programs for individuals who are sick or otherwise unable to get coverage—would cover those with large medical expenses who have not maintained continuous coverage. Another proposal, which is very much in line with Republican orthodoxy, would send Medicaid funds to states as block grants.

None of that will have much of a direct impact on the medical device industry, but it is heartened by another likely outcome of a Trump presidency: The repeal of the device tax. As reported in PlasticsToday at the beginning of the month, a Trump win would almost certainly sound the death knell of the 2.3% excise tax, which was suspended for 2016 and 2017 and is scheduled to go back into effect on Jan. 1, 2018. The medical device industry is feeling very confident that a device tax repeal is highly likely, said Larry Biegelsen, a senior analyst at Wells Fargo, as reported in MD+DI.

But even a permanent repeal of the device tax may have to wait until the Trump administration and Congress sort out what, precisely, they are going to replace Obamacare with. And, as Reuters notes in an article published yesterday (“Analysis: Trump promised to repeal Obamacare. Now what?”), “a complete repeal of Obama’s Affordable Care Act may not be immediately in the cards, as Republican lawmakers now hold 51 seats in the Senate at latest count, well short of the 60 seats required to overturn it." Reuters reporter Caroline Humer goes on to write that “scrapping the law altogether without a clear plan for providing replacement coverage for so many people,” including the 20 million-plus who did not have insurance before the ACA, would be politically risky.

“It’s a very big challenge,” agrees James C. Capretta, a leading conservative health policy expert and former Bush administration official now at the American Enterprise Institute, who is quoted in the Los Angeles Times. “There will be a lot of pressure to do something and to do it relatively quickly . . . but the big complication with repeal and replace has always been, how do they handle the replace part?”

“You can’t just pull the plug on 20 million people,” warned Gail Wilensky, also quoted in the Times article, who headed the Medicare and Medicaid programs under President George H.W. Bush and helped Sen. John McCain (R-Ariz.) develop a healthcare plan during his 2008 presidential campaign.

Michael Lang, a member of the Medical Devices Group on LinkedIn, echoes that concern and reminds us that the political is personal and vice versa. Commenting on a question posted by group wrangler Joe Hage—What will Trump’s victory mean for the medical devices industry?—Lang wrote, “I’m also wondering what will happen to the millions already covered. I'm unemployed at the moment and covered under Obamacare. I’m afraid [Trump] will just cut people off. He is unstable. The U.S. and its millions of immigrants and diverse citizens are in trouble.”

On the other hand (and the other side of the political divide), there would be hell to pay if fundamental changes were not introduced into our healthcare system, considering that repealing and replacing Obamacare has been a top priority, at least rhetorically, for the Republican party and Trump. This is going to be a very delicate needle to thread, and the deftness with which it is handled will be a window into the tenor of the next four years.

On a more general note, Trump’s commitments to the business community, as enshrined in his “Contract with the American Voter”—reducing the business tax from 35% to 15% and scaling back federal regulations by requiring that two existing regulations be eliminated for each new one—also resonate with the medical technology industry. After all, it knows a thing or two about regulatory overreach. And many within the industry are hopeful that under President Trump a more business-friendly leadership and approach would prevail at FDA and other federal agencies.

The medical device industry and many other sectors are nervous, however, about Trump’s stance on foreign trade agreements, which he has pledged to renegotiate or reject. We have been down the road of protectionism and trade wars, and it didn’t end well.

There are a lot of expectations, and at least some trepidation, out there. As one person taking the Qmed survey wrote, perhaps getting a bit carried away by the possibilities of what a Trump administration might accomplish: “Reduce unnecessary regulations, reduce cost of new product/drug development, reinstate free-market health care, ensure the government control of this industry is focused when absolutely necessary—not generalized and ever-present.”

That’s a lot of hope and change coming from the other side as we slide into 2017. Let’s see what happens.