In the land of healthcare and biotech, January has been off to a hot start. Many are waiting to see what impact the new Trump administration will have on the healthcare industry at large. J.P. Morgan, the conference synonymous with the new year for biotech, just wrapped with some of the biggest deals announced in recent memory. My colleagues Amber Fennell and Tracy Cheung comment separately on this, but in the meantime, here are four key areas we’re watching in 2025.
What the Trump Administration’s Policies Will Mean for Healthcare
It’s the question on everyone’s mind and yet it’s still probably too early to say exactly what will happen. However, we can expect some significant shifts based on what’s been said, and we’ll be watching the first 100 days of the presidency for clues.
We’re also watching the major players in healthcare in the incoming government and their likely agendas. The confirmation hearings of President Trump’s Cabinet, including Robert F. Kennedy, Jr., for head of the Department of Health and Human Services and Martin Makary for FDA commissioner, will take place per protocol but nonetheless something we’ll be watching for hints on their policy and regulatory stance.
The Role of the Food & Drug Administration and How Regulation Will Change
Another key area to watch is the Food & Drug Administration’s (FDA) approach to drug approvals and healthcare regulations in general. The Trump administration could push for faster approval processes, which could benefit drug developers looking to bring new treatments to market quickly. However, this may also call into question the review process and safety of drugs. Still, many decisions could still be left to career government officials, and many industry leaders (and the market) saw Dr. Makary as a stable nominee to lead the agency.
Pricing and Reimbursement of Weight Loss Medicines
We’ve seen incumbents double down on GLP-1-targeting medicines for obesity and weight loss, but we’ve also seen new companies sprout up to address the overwhelming demand for these therapies. The pricing and reimbursement of these weight loss medicines will be another area to watch, as the U.S. Centers for Medicare and Medicaid Services (CMS) recently announced it will engage (not surprisingly) in pricing negotiations for Ozempic and Wegovy (among other medicines) under the Inflation Reduction Act. The Biden administration also proposed a rule that would expand coverage of GLP-1 medicines for the treatment of obesity under Medicare Part D and Medicaid starting in 2026. We will be watching what action the Trump administration will take on this proposed rule, but if approved, it could increase Medicare outlays by $55.5 billion and Medicaid outlays by $84.2 billion in a 10-year budget window, according to the Penn Wharton Budget Model.
Cracking Alzheimer’s Disease with New Types of Treatments
This one hits on a personal level as several of my family members have passed away with Alzheimer’s disease over the years without any meaningful treatment options at the time. I’m admittedly biased in holding out hope, but collectively we have reason to. Today, we have approved treatments on the market, and while there is much to learn yet about the commercial rollout of FDA approved treatments for Alzheimer’s, the good news is that companies are already working on next-generation treatments that go beyond targeting amyloid plaque alone. How the data will pan out remains to be seen and innovators will continue to need to justify the clinical benefit and value these treatments bring to the healthcare system, but there will be a lot of storylines here in the year ahead.
U.S. and China Relations in the Life Sciences
We expect U.S. government scrutiny of China-based life sciences companies and Chinese research programs to persist in the coming year. Most recently, the U.S. Commerce Department announced plans to impose export controls to China on certain laboratory equipment which could allegedly generate biological data to enable the development of AI and biological design tools. And although the BIOSECURE Act did not pass during the last Congress, we will be watching to see how it may reappear on legislative agendas and the impact on drug developers who rely on the technology and services made or provided by Chinese companies named in the act.
That said, investors and industry experts are increasingly paying attention to homegrown biotechnology innovation coming out of China. A Stifel report cited by STAT News found that more than one-third of drug candidates acquired by pharmaceutical companies came from China last year, up drastically from zero four years ago. There will no doubt be additional developments in the year to come.
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