Trump v Harris: What is the impact on biotech?

The upcoming presidential election is poised to significantly impact the biotech sector, said Evercore ISI, in a note dated Friday.

Traditionally, presidential candidacies are not heavily influenced by the Vice President. However, nominees can sometimes help (e.g., Obama-Biden) or hurt (e.g., McCain-Palin) the ticket. For Harris, it is expected that her VP pick will appeal to suburban voters, with Mark Kelly from Arizona as a potential candidate, said Evercore ISI. The VP's influence is generally limited, and likely even more so under Trump, although the VP would be a prominent voice on populist issues.

Importance of Healthcare in the Election and Trump 2.0 Impact

Healthcare remains a crucial issue for voters, especially in swing states, though it ranks below the economy and border security. "Medicare for All" is unlikely to be revisited by Harris, but reproductive rights are expected to be a key issue in her campaign. Given past challenges in repealing the ACA, the GOP may be less motivated to try again. Both Trump and Harris are likely to address drug pricing, maintaining a focus on tough IRA negotiations.

Impact of a Trump Presidency on the Macro Economy

Evercore ISI expects one rate cut prior to the election. If re-elected, Trump may use the Federal Reserve as a political tool rather than immediately firing Powell. A credible Treasury Secretary could act as an internal counterweight to inflationary policies like tariffs and immigration. A potential skirmish with the Fed could arise if Trump pursues these policies.

Potential Election Outcomes

The GOP is likely to take control of the Senate, as Democrats are defending seats in several challenging states. The House outcome is less certain and could be a close race. The presidency appears to favor the Trump-Vance ticket, but the Harris campaign still has time to change the dynamics dramatically.

While the VP's role may be limited, healthcare remains a significant issue. Economic policies under a potential Trump presidency could create tensions with the Fed, and the election outcomes for the Senate and House remain uncertain. The overall impact on the biotech sector will largely depend on the specific policies and political dynamics that unfold post-election