Joe Biden’s US election victory: a win for medtech too?

Chloe Kent 12 November 2020 (Last Updated November 12th, 2020 10:54)

President-elect of the United States Joe Biden was announced to have officially clinched the crucial votes needed to oust Donald Trump on 7 November, after a tense few days of vote counting in key states. In an electoral period marked by the Covid-19 pandemic and social upheaval, Medical Device Network takes a closer look at what the Biden administration could mean for the medtech industry.

Joe Biden’s US election victory: a win for medtech too?
Biden’s stance on Covid-19 is likely to have been particularly attractive to medical device companies. Credit: Gage Skidmore

Four days after the polls closed on 3 November, US Democrat nominee Joe Biden finally surpassed the required 270 electoral college votes needed to be declared President-elect, ousting the tumultuous Trump administration that has dominated global discourse for the past four years. Biden’s inauguration ceremony is set to take place in late January 2021.

President Donald Trump has since refused to concede the election, maintaining that mass electoral fraud has occurred. However, this hasn’t stopped the Biden camp from declaring victory. While Trump’s campaign team has attempted to launch lawsuits over the matter in several states, many have already been dismissed, with no substantive evidence of electoral fraud presented thus far.

Healthcare has been a major battleground in this election, something which is unsurprising given the impact of the Covid-19 pandemic on almost all aspects of public life. Donations to the Democrat party from the health sector reached their highest level in 20 years in the run-up to the election, with 56% of all political contributions from the industry going to the party.

After the votes were tallied, four of the top seven US medtech hubs – the states of California, Massachusetts, Minnesota and Washington – all wound up falling into the Democrat camp. The three red states of the group – Florida, Indiana and Texas – also saw generally tighter races, with Biden netting an average of 45% of votes across these territories compared to Trump’s average of 37% of votes in the blue states.

Biden’s new approach to Covid-19

Biden’s stance on Covid-19 is likely to have been particularly attractive to mdtech companies. He plans to utilise the Defense Production Act – a Korean War-era law that enables extra government actions to boost needed supplies – to produce more personal protective equipment (PPE) like masks, something which could provide a considerable boost for the manufacturers of these devices.

Biden also plans to ensure the wide availability of free Covid-19 testing for US residents, and aims to eliminate all cost barriers to preventive care and treatment for the virus. In a country where state-supported healthcare is controversial at best, this is a fairly radical stance for the Democrats to take.

His website states that: “Individuals should also not have to pay anything out of their own pockets for the visit at which the test is ordered, regardless of their immigration status.”

At least ten mobile testing sites and drive-though facilities per state are being promised to expedite testing and protect healthcare workers. The Centers for Disease Control (CDC) are expected to work with private labs and manufacturers to ensure adequate production, quality control, training and technical assistance. The CDC is also expected to work with scientists to clarify testing criteria, potentially prioritising first responders so they can remain in work and on the front lines of the crisis.

This rapid surge in the country’s testing capacity will be welcomed by companies that manufacture Covid-19 tests, as it gives them a footprint to distribute their product on a much larger scale than is currently possible.

Medtech manufacturers that produce hospital equipment like ventilators will also be pleased to hear about the Biden administration’s plans to establish ‘hotspot’ hospitals to combat virus surges. Plans are being made to set up temporary hospitals with capacities in the hundreds in any city at short notice by deploying the existing Federal Medical Stations in the strategic national stockpile. The stockpile has medicines and supplies stored in strategically located warehouses throughout the country, ready for deployment. As the supplies are drained, medtech companies will have the opportunity to work with state and local authorities to replenish them.

Biden also plans to restore the White House National Security Council Directorate for Global Health Security and Biodefense, a council established by the Obama-Biden administration and eliminated by the Trump administration two years ago. The new administration will also provide economic relief for small businesses and those hit hard by the virus.

The Affordable Care Act

As Obama’s vice-president, Biden has close ties to the Affordable Care Act (ACA), a comprehensive healthcare reform launched in 2012 and designed to make affordable health insurance available to more people in the US. As a presidential candidate and now as President-elect, he has repeatedly committed to strengthening the ACA and further expanding access to health insurance.

The US Supreme Court California v. Texas case challenging the constitutionality of the ACA opened with oral arguments on 10 November. The lawsuit, which threatens millions of citizens’ access to healthcare during a global pandemic, maintains that the ACA’s individual mandate – which requires people to have insurance or pay a tax penalty – is unconstitutional.

While the penalty was struck down in 2018, the mandate itself is still technically part of the law, which now states that people “shall” buy health insurance. The challengers maintain that this language is meant to coerce people into buying it, and is thus unconstitutional. They have maintained throughout the case that this constitutional flaw requires dismantling the entire ACA, rather than rewording it.

Republicans have been unsuccessfully trying to repeal the ACA for years, and conservative US Supreme Court judges have implied that it will ultimately be upheld.

Biden has said that, regardless of the outcome of this case, his administration will work to expand public health coverage once he takes office. He has also commented that “[t]his effort to bypass the will of the American people, the verdict of courts in the past, the judgments of Congress, in my view, is simply cruel and needlessly divisive.”

Should healthcare coverage be reduced as a result of this case, there could be a decline in elective procedure coverage for citizens as fewer people will be able to afford them. Hospitals’ bad debt expenses are also likely to increase. Both of these factors would negatively impact medical device companies, as they would have less opportunity to sell their equipment in a market when fewer people or institutions can afford to buy.

However, the fact that Biden has pledged to expand public health coverage regardless of the ACA’s status is heartening. Even if the worst-case scenario of the entire act being scrapped were to come

to fruition, this would not prevent the Democrats from enacting a different accessible healthcare policy – although, the interim period could still be devastating for millions.

Medtech reacts

Looking forward, what do medtech stakeholders make of the win? How will the Democrat administration work with the industry for the remainder of the pandemic, and beyond?

Digital health manufacturer S3 Connected Health director of solutions Bill Betten says: “Moving forward, it’s already clear the new administration has a greater focus on Covid-19, and for the next year the focus in medtech is therefore likely to revolve around addressing how to treat and prevent the disease.

“It will be interesting to see how the Democratic administration continues the use of telemedicine technology in a post-COVID environment. There’s significant opportunity for the US to build on the base established during the pandemic, and extend telemedicine beyond remote consulting (i.e. video calls with your physician) to be able to monitor, diagnose, and potentially prevent illnesses via digital means.

“Whatever the focus, it’s important to remember: there will be another coronavirus. Both the new administration and the medtech industry must take learnings from 2020 and consider how they can support one another in preparing for that eventuality.”

Artificial intelligence company IPsoft subsidiary Amelia senior adviser and ex-Minister of Finance for Sweden Anders Borg says: “The Democrat win is certainly positive news for the tech industry. While we’re entering an age of greater regulation for tech and it’s easy to get too optimistic, the general mood in the industry has undoubtedly picked up since the election result.

“It’s also a good result for medtech – we know that Biden has previously campaigned on shifting production of medical equipment and other products back to the US to boost the domestic supply chain and the sector. So it is likely the Democrats will want to invest more in telemedicine solutions too, particularly focusing on AI which is already providing excellent value in enabling medical professionals to focus on complex problems by taking on repetitive administrative tasks.”