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Just before the presidential elections, Applied Clinical Trials asked Parexel CEO Josef von Rickenbach what the impact of a Democratic or Republican victory might be on the clinical research enterprise. He raised concerns about funding for federal agencies, under any administration, and that health reform would be positive for pharma over the long run.
Von Rickenbach noted that the biomedical research community is interested in public policies that give the R&D sector a lift in one way or another. Republican administrations generally tend towards less FDA enforcement activity, which might be beneficial. Although you have to have maintain standards, he said, above a certain level, enforcement activity merely “gilds the lily” and makes research more expensive. There is a finite amount of money to support research, and, he noted, you can’t spend it all on quality management.
Under an Obama administration, von Rickenbach predicted that “health care reform will be here to stay.” And eventually, he predicted, “that will be positive for pharma, as it will give buoyancy to the market.”
Government funding for FDA and research are a real concern. Von Rickenbach said he’s less worried about FDA, because it is such a very public agency and governs so much of the economy, that it’s very much in the consumer’s mind. “The administration can’t really unfund FDA without serious consequences.” More troubling is the prospect of major funding cuts for the National Institutes of Health. Although NIH doesn’t fund commercial research, it plays a vital role in supporting discovery, which is important for small companies. Parexel is working with a small biotech company developing a product based on NIH research, von Rickenbach noted, and with severe budget cuts, NIH would do less in this area.