“Every administration has its headwinds and tailwinds” said Tim Hunt, CEO, Alliance for Regenerative Medicine (ARM), when examining the impact of the two most recent U.S. administrations at ARM’s 2025 State of the Industry Briefing in January.
Credit: Alliance for Regenerative Medicine
Under Trump’s first administration, headwinds mentioned by Mr. Hunt included the immigration ban that biotech executives warned could make it harder to attract talent from overseas, along with efforts to tie Medicare drug prices to foreign benchmarks via the Most Favored Nation (MFN) rule, which attempted to lower U.S. drug prices by tying Medicare reimbursements to the lowest price paid by a selection of foreign countries, including Canada.
Canada controls drug prices through the Patented Medicine Prices Review Board, which sets price ceilings based on an international reference group. Drug developers often set higher prices in the U.S. to recoup research and development costs, which are less subsidized there than in many other countries. Following industry pushback, which argued that the MFN rule discouraged investment in new therapies, along with legal challenges, the rule was rescinded by the Biden administration in 2021 before it ever took full effect.
One enduring tailwind from Trump’s first administration was the appointment of Scott Gottlieb as U.S. Food and Drug Administration (FDA) commissioner, who, Mr. Hunt said, “ended up being a terrific FDA commissioner, certainly for cell and gene therapy from 2017-2019…there was a proposed rule that they did a fantastic job on, that eventually got finalized in the Biden administration, that would really kind of enable outcomes-based arrangements in both the commercial setting and in Medicaid by working through things like Medicaid best price – something the industry really lobbied for and we were delighted when this rule came out.”
Under Trump’s second administration, these efforts look set to continue. “Half of the gene therapy/gene editing patient populations are probably in Medicaid, something around that order,” estimated Mr. Hunt. “It depends on the disease, could be more, sickle cell is higher, with some it’s going to be less, but thinking about ‘how do we modernize Medicaid to embrace cell and gene therapy’ is a major advance for our field, so a major tailwind there.”
Mr. Hunt sees real opportunities in the alignment between what the industry promises to deliver and some of the stated goals of Trump’s second administration: particularly in terms of the desire to address the root causes of diseases and “get away from chronic care, the pills of the past, on some level,” as Mr. Hunt put it.
Credit: Alliance for Regenerative Medicine
One headwind on many minds is the U.S. National Institutes of Health’s (NIH) attempt to cut indirect funding, capping the overhead payments that institutions receive to support research infrastructure at 15 per cent. The American Society of Gene and Cell Therapy released a statement expressing concern, joining dozens of leading research universities that have released statements and joined forces to challenge the cuts in federal court (separate from the lawsuit filed by the attorney generals of 22 different U.S. states). As of this writing, the cuts remain blocked by a nationwide injunction issued March 5, with the Trump administration expected to appeal.
Some have gone as far as to describe the attempted cuts as a “Science Apocalypse,” so it is only fair to include the rationale that NIH gave when announcing them, stating “Last year, $9B of the $35B that the National Institutes of Health (NIH) granted for research was used for administrative overhead, what is known as “indirect costs.” Today, NIH lowered the maximum indirect cost rate research institutions can charge the government to 15%, above what many major foundations allow and much lower than the 60%+ that some institutions charge the government today. This change will save more than $4B a year effective immediately.”
Back over to tailwinds to finish on a positive note: Ongoing regulatory innovation spearheaded by Dr. Peter Marks, Director, Center for Biologics Evaluation and Research (CBER) at the FDA was mentioned by two speakers on a commercially-focused panel – Capital markets and commercial insights: navigating opportunities and challenges in CGTs – which formed part of the ARM briefing. Each panelist shared thoughts on tailwinds to come:
Dr. Kinnari Patel, President, Head of R&D and Chief Operating Officer, Rocket Pharma:
“Administrations may come and go… but the regulations, the people and teams have been strengthened, so I’m really excited about that… the momentum being built in CBER specifically….” Dr. Patel also cited collaboration with the European Medicines Agency – discussed in this Signals blog post – as a positive sign.
Dr. Jim Birchenough, Chairman and Global Co-Head, Barclays Biopharmaceutical Investment Banking:
“I heard this weekend a lot of talk about AI in different facets of drug development, but at FDA, actually being used to do the mundane work that can free up reviewer time to have direct interactions on a more frequent basis with sponsors, so that’s something that we’re watching very closely, it could be a very positive dynamic.”
Keith Crandell, Co-founder and Managing Director, ARCH Venture Partners:
“I’m sort of expecting a little bit of confusion over the next few months…I think it’s sort of incumbent on the boards of the companies that are involved and also on the management to really reach out and focus on education… I think there is a tremendous amount of momentum behind the industry, and I think most political groups like success, and I think that this set of technologies and curative therapies offers them a tremendous amount of wins.”
Lynelle Hoch, President, Cell Therapy Organization, Bristol Myers Squibb:
“What we are excited about is this Administration seems to have a bold mindset of he [Trump] wants to lead in science, and he believes in innovation and he believes in what it takes to innovate. So we do hope that we can harness that mindset to be able to forge ahead as a leader overall in cell therapy, as a country but also as an industry.”
Cal Strode
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