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Government Shutdown, SBIR Expiration, and Trump’s Pharma Moves | Making Medicine Podcast · Making Medicine

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  Speaker 1: At Making Medicine. We're reporting on the headlines, not making
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  Speaker 1: medical recommendations. For personal health questions, always consult a doctor.
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  Speaker 1: Nothing in this episode constitutes investment, financial, or legal advice,
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  Speaker 1: and please consult your own advisors before making decisions. Hello everyone,
• 0:24
  Speaker 1: and welcome back to the Making Medicine Podcast, where science,
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  Speaker 1: policy and innovation meet. As always, I'm your host John Stanford.
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  Speaker 1: This week we're back with top stories from around the
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  Speaker 1: industry in Washington, and with that, let's get into the show.
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  Speaker 1: Our top story is that, as of recording, the federal
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  Speaker 1: government is shut down. The Senate was unable to come
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  Speaker 1: to an agreement on the House Past Continuing Resolution, leading
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  Speaker 1: to a government shutdown effective midnight Wednesday morning. What's next.
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  Speaker 1: Negotiations will continue, but there's no clear path forward. Republicans
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  Speaker 1: are pushing for a clean funding bill to keep the
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  Speaker 1: government running at current levels, while Democrats insist that any
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  Speaker 1: deal must also extend Affordable Care Act subsidies to prevent
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  Speaker 1: premium hikes in twenty twenty six. To pass a budget,
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  Speaker 1: Republicans will need at least eight Democrats to join them
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  Speaker 1: in the Senate to move the bill forward. About seven
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  Speaker 1: hundred and fifty thousand workers were put on furlough this week,
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  Speaker 1: but let's dive deeper into what the impact on the
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  Speaker 1: biotech community might be. First is, of course, the furloughs
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  Speaker 1: and reduced staff at regulatory agencies. President Trump will have
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  Speaker 1: the decision on deeming who is an essential employee and
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  Speaker 1: who is furlowed, but even among that essential staff, some
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  Speaker 1: capacity may be reduced. Historically, at the FDA, thirty to
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  Speaker 1: forty percent of employees were furloughed. Some functions that the
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  Speaker 1: FDA are funded by user fees as opposed to congressional appropriations,
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  Speaker 1: which will allow regulatory work to continue for a time,
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  Speaker 1: but it may lead to a halting of new submissions
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  Speaker 1: or even the fee processing. So businesses and companies pursuing
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  Speaker 1: IDs IDs pre submissions NDAs might find some trouble in
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  Speaker 1: either submitting the payments or getting their new submissions processed.
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  Speaker 1: It also often has led to delays and review, approval
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  Speaker 1: and guidance, as well as inspections, audits, and compliance oversight. Basically,
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  Speaker 1: the busy work that makes the FDA so strong might
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  Speaker 1: slow down. NIH, a critical source of funding for so
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  Speaker 1: much basic research, will also potentially be delayed. Grant peer
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  Speaker 1: review panels may be postponed. New award fundings or disbursements
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  Speaker 1: may be delayed. More broadly, there's an impact of a
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  Speaker 1: government shutdown on investor confidence and the ability to strategically
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  Speaker 1: plan for companies. All of these will be something we're watching,
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  Speaker 1: as well as how we get out of the backlog
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  Speaker 1: when the shutdown ends. Notably, in twenty nineteen, our most
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  Speaker 1: recent shutdown delays on approvals, reviews and other things were
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  Speaker 1: measured in days, not weeks, But ultimately how long the
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  Speaker 1: shutdown lasts will determine how much impact it has. Also
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  Speaker 1: ending on September thirtieth, for now, is the SBIR and
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  Speaker 1: STTR programs. Despite House pass bills that would have allowed
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  Speaker 1: for a one year reauthorization to keep the SBIR and
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  Speaker 1: STTR programs running, the Senate was unable to move on
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  Speaker 1: that legislation, leading to a sunset of the program for
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  Speaker 1: the first time since it was created in nineteen eighty two.
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  Speaker 1: As many of you know, the SBIR program is a
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  Speaker 1: critical lifeline for that valley of death where non delutive
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  Speaker 1: funding can go to innovative companies, not just in biotech
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  Speaker 1: but across many sectors, and it's been a hallmark of
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  Speaker 1: successful government support of innovative companies. Democrats and Republicans have
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  Speaker 1: been at odds over SBIR reauthorization for several months now.
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  Speaker 1: Understanding the threat to innovation that a pause on SBIR
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  Speaker 1: may bring, the House Small Business and Science, Space and
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  Speaker 1: Technology chairs and ranking members co sponsored a deal that
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  Speaker 1: would allow more time for negotiation to improve the program.
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  Speaker 1: Over in the Senate, however, there's been fierce debate between
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  Speaker 1: Senator Markey and Senator Ernst, who have wildly different visions
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  Speaker 1: for how the program should move forward, and it's that
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  Speaker 1: stalemate that has led to the program's pause. Incubate, along
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  Speaker 1: with dozens of other organizations, will be working to end
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  Speaker 1: this pause as swiftly as possible because the SBI is
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  Speaker 1: a proven program that continues to deliver both for innovation
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  Speaker 1: and for the taxpayers even amid the shutdown conversation. That
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  Speaker 1: wasn't the only news this week. President Trump announced a
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  Speaker 1: new deal with Pfeiser, with the CEO Albert Burlaugh on
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  Speaker 1: stage talking about how he's moved forward on his most
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  Speaker 1: favored nations proposal. As we've covered extensively, on May twelfth,
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  Speaker 1: President Trump signed an executive order directing the administration to
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  Speaker 1: take a number of actions to bring American drug prices
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  Speaker 1: in line with those paid by other wealthy countries. On
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  Speaker 1: July thirty first, President Trump sent letters to leading manufacturers
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  Speaker 1: insisting that they bring down prices through a number of steps.
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  Speaker 1: That deadline set in that letter came and went this week,
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  Speaker 1: and we had a notable announcement with Pfiser about how
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  Speaker 1: they have moved forward with this most Favored Nation pricing.
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  Speaker 1: President Trump shared that his team had come to an
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  Speaker 1: agreement that will lower the cost of Pfizer branded drugs. Primarily,
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  Speaker 1: it was an announcement that Pfizer would not sell its
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  Speaker 1: drug outside the United States for lower prices than what's available.
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  Speaker 1: This most Favored Nation price would be available through the
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  Speaker 1: Medicaid program. President Trump also announced a new website, Trump
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  Speaker 1: r X that will be a consumer facing website available
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  Speaker 1: for direct to patient purchasing. The announcement included other commitments
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  Speaker 1: about on shoring, increased R and D, as well as
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  Speaker 1: efforts that Pfiser will remain very America focused. What it
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  Speaker 1: didn't say, however, was a lot of the details about
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  Speaker 1: this announcement, as well as if any other companies will
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  Speaker 1: be moving forward with similar pledges. President Trump certainly alluded
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  Speaker 1: to that, but a number of the elements of the
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  Speaker 1: deal will remain confidential, and so we'll still be waiting
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  Speaker 1: to see how this will have impacts. The markets responded
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  Speaker 1: generally favorably, possibly signaling an end to the turmoil in
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  Speaker 1: their view of the MFN conversation, and again, with so
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  Speaker 1: many details missing, it's unclear how it will impact Peiser's
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  Speaker 1: bottom line. But more broadly, and as Incubate noted in
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  Speaker 1: our statement, there is continued uncertainty about this administration and
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  Speaker 1: the ability to invest further in an environment where we're
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  Speaker 1: talking about MFN, possible tariffs and other actions. So while
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  Speaker 1: it is great to see actions being taken around the
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  Speaker 1: world to make sure that other countries fairly value medicine,
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  Speaker 1: it's also critically important that we close the chapter on
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  Speaker 1: these wild proposals that would dramatically decrease the ability to
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  Speaker 1: invest in US biotech. And finally, tariffs remained in the
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  Speaker 1: news when last week President Trump announced plans for an
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  Speaker 1: one hundred percent tariff on branded or patented pharmaceutical products
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  Speaker 1: beginning October first, unless companies are building manufacturing plants in
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  Speaker 1: the United States. This had some intersection with our announcement
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  Speaker 1: around MFN that we just discussed. Pfizer CEO Albert burla
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  Speaker 1: added during the announcement that quote, the President graciously gave
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  Speaker 1: us three years grace period that we will not be
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  Speaker 1: subject to the two thirty two tariffs as long as,
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  Speaker 1: of course, we move the products here. Parsing Burlough's words
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  Speaker 1: will require more as Section thirty two investigation results come out.
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  Speaker 1: Commerce Secretary Lutnik also shared insights about the ongoing two
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  Speaker 1: thirty two investigation, noting that the results will be delayed
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  Speaker 1: at least until the administration has had the opportunity to
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  Speaker 1: finish negotiations with other pharmaceutical manufacturers, So tariffs, at least
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  Speaker 1: for now, seem to have been dramatically tied to the
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  Speaker 1: negotiations with companies as it relates to MFN, as we
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  Speaker 1: had previously reported on. Also, because so many listeners are
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  Speaker 1: tied to different elements of the healthcare industry, it's worth
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  Speaker 1: noting that the Department of Commerce has requested a comment
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  Speaker 1: on Section two thirty two investigation on Personal Protective Equipment
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  Speaker 1: ppe medical consumer and medical devices. Those comments are due
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  Speaker 1: October seventeenth. That's all for this week's episode of the
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  Speaker 1: Making Medicine Podcast. Have a thought or question about today's topics,
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  Speaker 1: drop a comment and we'll feature it in next week's episode.
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  Speaker 1: Don't forget to subscribe on YouTube and follow us on LinkedIn,
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  Speaker 1: for listening, and as always, keep innovating