With the Republican Party, led by Donald J Trump, holding not only the Senate but also the House of Representatives, the President Elect has a clear mandate for sweeping changes to US Healthcare. President Elect Trump has wasted no time in nominating Robert F Kennedy Junior to head Health and Human Services (HHS), giving him sweeping powers over agencies with the potential to radically remake US healthcare.
Over the next four years (which may change with the midterm elections in 2026) the three branches of the US Government will collectively determine how healthcare with its many different components will be delivered and most importantly, paid for.
Healthcare is expensive and according to the Centers for Medicare and Medicaid, US healthcare spending grew 4.1 percent in 2022, reaching $4.5 trillion or $13,493 per person. As a share of the nation’s Gross Domestic Product, health spending accounted for 17.3 percent.
The Democratic Party’s healthcare agenda reached its apex 14 years ago with the passage of the Affordable Care Act (ACA), which was signed into law on March 23, 2010. It was the most significant healthcare bill since 1965. Many of the provisions of the ACA were major points of contention with Republican Party, and for several years, they vowed to repeal its passage. However, many have benefitted from the provisions of the ACA that allowed millions to purchase subsidized health insurance plans, assured those with pre-existing conditions (the basis of most rare-disease treatments) would not face discrimination from insurance companies, and allowed people under 26 to remain under their parents’ insurance. Completely repealing the ACA could hurt more than help the Republican Party, unless there is a radically different but all-encompassing alternative in the works.
The White House has indicated that from his first day in office, Donald Trump will mostly likely issue executive orders to repeal prior Democratic legislation and initiatives. Until the executive orders are issued or leaked, we do not know what impact they will have on healthcare.
Right now, it is all a waiting game. During President Trump’s prior term, things changed overnight. What has changed, as we are seeing with the rollout of leadership appointments, the Trump Administration is prioritizing leaders who will carry out his policies without question. Still, the new Republican Platform has not been released so again we wait.
Healthcare business may see change due to the composition of the Federal Trade Commission (FTC). Lina Kahn has served as chair of the FTC since 2021 and is considered a leader in anti-trust suits in the technology and healthcare sectors. Although there is bi-partisan support for investigations into Pharmacy Benefit Managers (PBMs), Kahn will not be reappointed under President Trump and many see the FTC becoming more pro-business under future new leadership, which may bode well for the entire healthcare business sector where M&A is an integral part of expanding markets and filling pipelines.
Another area that will be under scrutiny is the leadership appointments at the key US institutions overseeing healthcare spending, healthcare research, pandemic prevention, social programs including Medicare and Medicaid, and the Veteran’s Health Administration. By far the most important appointment will be the Secretary of Health and Human Services and through his nomination of RFK Jr, Trump may already have set a course for conflict within his own party.
The HHS Secretary is a cabinet-level appointment that requires confirmation from the Senate. Within hours of the announcement, Republican leadership has questioned if RFK Jr. is the correct choice and it may prove to be one of the most engaging hearings of 2025. The HHS Secretary oversees a department with a budget of $1.7 Trillion and over 80,000 employees. The subordinate agencies reporting to HHS include National Institute of Health, Centers for Disease Control (CDC), Food and Drug Administration (FDA), Substance Abuse and Mental Health Administration (SAMHSA) among others. All the leadership positions at these agencies will be announced over the upcoming weeks and those members will define the future of US healthcare delivery.
Leaving the politics aside, the nomination of RFK Jr. to head HHS has already upset the biopharma applecart. The nominee’s previous public positions on vaccines no doubt explain why vaccine makers such as Moderna saw their stock punished when the news of his nomination emerged and he has indicated that he sees himself on a collision course with the FDA. While there are plenty of reasons to think a Trump administration will be a boon for business overall, the biopharma industry is apprehensive.
As we head to January 20th and a new President and Congress are installed, healthcare policy will remain the same. The future of US healthcare will become clearer when the Republican Agenda for 2025 and beyond is presented and the key members of the new Trump Administration are confirmed into their positions by the US Senate.
