Trump's ongoing battle with the pharma industry shows no signs of easing

When a newly reconstituted federal vaccine committee meets this Thursday and Friday, it is widely expected to consider a controversial report prepared by federal health officials that purports to link coronavirus vaccines to the deaths of 25 children, despite little evidence. That report is the latest salvo in a battle being waged by the Trump administration against the drug industry that has created turmoil for pharmaceutical and biotech companies and their investors.

The battle lines were drawn last November when President Donald Trump announced that he would name Robert F. Kennedy Jr., a long-time critic of the drug industry and a vaccine skeptic, as his nominee for Health and Human Services Secretary. The stocks of vaccine makers Pfizer $PFE and Moderna $MRNA lost almost $8 billion in market value on the news — a taste of things to come.

Since Kennedy was confirmed in January, he has doggedly pursued his goal of ending what he calls “pharmaceutical capture” of America’s health agencies. He regularly claims that staffers at the agencies under his purview are too friendly to the companies they regulate.

The Department of Health and Human Services, responsible for the public health of Americans, oversees the Food & Drug Administration, the Centers for Disease Control and Prevention, and the National Institutes of Health. On taking office, Kennedy quickly announced plans to reduce the HHS workforce by 25%, or approximately 20,000 employees, shrinking what he called a “bloated bureaucracy compromised by industry ties.”

His tenure has been marked by a stream of high-level resignations at the FDA, and in late August Kennedy stunned the health world when he fired CDC director Susan Monarez, just weeks into her job. In Congressional testimony on September 17, Monarez described a private meeting with Kennedy in which he called the CDC “the most corrupt federal agency in the world” and said its employees were “bought by the pharma industry.”

Monarez said she was fired because she would not commit in advance to approving every recommendation by the Advisory Committee on Immunization Practices (ACIP), an influential vaccine advisory panel meeting this week, regardless of the scientific evidence, and because she would not fire CDC scientists without cause.

She also testified that Kennedy told her he plans to change the childhood vaccine schedule in September, without giving her any scientific evidence to justify that change, and that he said he speaks to Trump “every day” about changing the childhood vaccine schedule.

ACIP plays a critical role in determining national vaccine policies by making recommendations of who is eligible for shots and whether the vaccines should be covered by insurance. When ACIP meets this Thursday and Friday, HHS officials are expected to present the report that COVID vaccines may be responsible for childhood deaths.

The report appears to be based on information submitted to the federal Vaccine Adverse Event Reporting System, which contains unverified reports of side effects or bad experiences with vaccines that can be submitted by anyone, be it patients, doctors, pharmacists, or even someone who sees a report on social media. The database is not designed to assess whether a vaccine caused a death.

According to the CDC, at least 1,289 children in the United States between the ages of 0 to 19 died from COVID-19 between April 2020 and July 2022, 234,000 were hospitalized, and about 1 million children have long COVID, with symptoms that persist or emerge at least three months after an infection. Claims that the vaccines can be dangerous to children have been disproven by several studies.

Kennedy already caused an outcry from critics and the industry in June when he fired all 17 members of ACIP and stacked the panel with vaccine skeptics. This week he named another five to the panel, including one who advocated unproven COVID treatments such as ivermectin and one who pushed back on pandemic mandates.

In August, Kennedy announced plans to cancel $500 million in funding for the development of vaccines for bird flu and other viruses based on the mRNA method used for COVID vaccines. That action shut down 22 projects led by major pharmaceutical companies, including, again, Pfizer and Moderna.

In a contentious Congressional hearing in August, Kennedy said he believes mRNA vaccines can cause a form of AIDS and can damage children’s organs, brains, hearts and immune systems or even lead to death. Numerous studies have demonstrated that shots using mRNA technology are safe and effective, and serious side effects are extremely rare.

Kennedy’s adversarial position towards the drug industry has influenced a number of Trump administration pharma policies beyond vaccines. Kennedy has long wanted to end drug advertisements, saying that such ads “allow companies to market powerful drugs with half-truths,” and he is close to getting his wish. On September 9, the president signed an executive order announcing sweeping changes to rules governing direct-to-consumer pharmaceutical advertisements, while the  FDA sent out thousands of letters warning drug companies to remove misleading ads and issued approximately 100 cease-and-desist letters to companies it said had deceptive ads. 

In addition, the FDA is initiating rulemaking that would require an end to a 1997 policy change that allows drug companies to disclose only some of the safety risks associated with a prescription drug in broadcast and digital ads, which enables them to make the ads short enough to advertise on television.

“Pharmaceutical ads hooked this country on prescription drugs,” Kennedy said in a press release. “We will shut down that pipeline of deception and require drug companies to disclose all critical safety facts in their advertising.”

In an editorial published in the Journal of the American Medical Association on September 12, FDA director Martin Makary wrote that the agency would also police drug advertisements on social media, which he said “are often presented as entertainment, blurring the boundaries between editorial content, user-generated media, and pharmaceutical advertising.”

Reverting to pre-1997 drug advertising laws would require drugmakers to disclose all risks in the ad. Given that "drug ads on TV are typically around a minute long, this rule, if enforced, would effectively nullify every pharma commercial in its current form,” wrote Emarketer healthcare analyst Raj Leventhal.

The United States is one of only two countries that allows direct-to-consumer advertising (New Zealand is the other). Various estimates have put drug industry ad spending at $14 billion a year, and a 2023 HHS study estimated that direct-to-consumer drove nearly one-third of the increase in spending on prescriptions by consumers since 1997.

Drug prices are also in the line of fire. On July 31, President Trump sent letters to 17 major drug makers demanding that they bring down the prices of prescription drugs in the United States to match the lowest price offered in other developed nations — known as the most-favored-nation price.

Trump tried to implement a most favored nation policy during his first term, but it was blocked by legal challenges, and the same is widely expected to happen this time around. It could still be a powerful negotiating ploy, however.

“I think this is the administration saying to itself, what's the worst imaginable thing I think I can do within the bounds of my authority to the industry to get them to the table so that they will announce and change some behaviors,” said Neal Masia of EntityRisk in a recent panel discussion.

Meanwhile, Trump is imposing a 15% tariff on medicines imported from the European Union, home to some of the world’s largest pharmaceutical companies. That ends a decades-long agreement to have no tariffs on innovative medicines between the United States and Europe 

The industry is pushing back. Merck $MRK, AstraZeneca $AZN, Bristol Myers Squibb $BMY Company, and Eli Lilly $LLY recently banded together to form a new lobbying group, IRA Watchdog, in order to present congressional lawmakers with research on what the industry sees as the negative impacts of drug price negotiations.

Kennedy also has some very prominent critics, among them Trump’s Surgeon General during his first term, Jerome Adams. Adams recently called for Kennedy to be removed from his post, saying “Leadership means showing up, telling the truth, and putting people first. RFK hasn’t done that.”