Keeping a Finger on the Regulatory Pulse

In a video interview with Pharma Commerce, James Shehan, chair of the FDA Regulatory practice at Lowenstein Sandler, discusses the potential impact of upcoming tariffs on pharmaceutical supply chains, focusing on Canada, Mexico, and China. He believes that tariffs on Mexico and Canada would have minimal effects on supply chains, as the pharmaceutical industry sources relatively little from these countries. The real concern lies with China, which is a major supplier of active pharmaceutical ingredients (APIs) and finished drug products. A significant portion of recent pharmaceutical deals has involved licensing Chinese drugs, which could be affected by tariffs if they disrupt supply chains.

If the relationship between the United States and China worsens, tariffs could have a more substantial impact. Specifically, they might increase the cost of generic drugs, since China is a crucial supplier for these products. Despite this, Shehan notes that many generic drugs are already extremely cheap, with some prescriptions costing just a few cents. Even if prices doubled, it may not drastically affect consumers. Specialty generic drugs, however, could see more noticeable price increases.

He also points out that if trade tensions extend to regions like the EU, India, or Japan, the situation could change. A broader trade conflict could influence drug prices, especially for certain medications. Overall, while tariffs on China may increase drug prices in the short term, the full impact will depend on the nature of global trade relations and the extent of supply disruptions.

Shehan also comments on how he believes the new administration will influence FDA approval processes for commercial products, other specific regulatory updates that drug developers should be closely monitoring in the current landscape, and much more.

A transcript of his conversation with PC can be found below.

PC: What other specific regulatory updates should drug developers be closely monitoring in the current landscape?

Shehan: The biggest thing to me right now is that our understanding is that decisions aren’t being made at NIH. That is very disturbing because there's a lot of cooperation between the pharmaceutical industry and NIH: funding, scientific collaboration. If it's a temporary pause, 30 days, while people change processes, not a big deal. But if that indicates some kind of big change in how the process works, that is concerning—and maybe less so for the more established part of the industry—but for all the startups etc. that have cooperative research projects with NIH, that could be huge. You really could see a little bit of a drying up at the earlier levels of the pipeline. Not that NIH does much drug development on their own, but some of that earlier-stage scientific work that lays the groundwork is done there.