March_Special Topics｜Changes in the U.S. Pharmaceutical Industry under the Trump Administration

Published On: 2025/03/14|Categories: 大健康(Healthcare)|

The U.S. government's spending cuts are shaking up the broader U.S. healthcare ecosystem, seemingly announcing that the era of abundant U.S. healthcare funding is over. Whether or not the U.S. will embark on an environment of healthcare austerity is yet to be seen, but optimization, streamlining, and efficiency will be the keynote of the current changes in U.S. healthcare. Since Trump's inauguration, the Department of Governmental Efficiency (DOGE) has intervened with CMS, the service center in charge of Medicare and Medicaid assets, to examine its internal spending waste or insurance fraud, and may further tighten the relevant health insurance or subsidy standards by lowering the percentage of subsidies and reimbursement rates for each state, or by increasing the number of conditions and restrictions, etc., and the National Health Research Institute (NIH), the CDC, and the National Institute of Health (NIH) have all been working on this issue. The budget cuts and layoffs in the US public health pillars such as the National Institutes of Health (NIH), the Centers for Disease Control and Prevention (CDC), and the US Food and Drug Administration (FDA) have drastically reduced the research funding and indirectly frozen the budgets for pharmaceutical R&D in hospitals, e.g., the reduction of the NIH research grants has indirectly lowered the rate of the hospital's research funding from 27% to 15%, which has caused a number of leading healthcare systems, such as the well-established Massachusetts General Hospital (Massachusetts) to cut their research funding to 15%. Massachusetts General has accelerated the implementation of manpower streamlining plans under the pressure of financial and operational costs, and the recent new order promulgating the policy of increasing the transparency of healthcare service prices in the first term of the Trump administration, which attempts to make public the prices of healthcare services that are only negotiated privately among doctors, hospitals, pharmaceutical companies and insurance companies, which can help patients to compare prices and save a lot of healthcare expenses. In addition to helping patients shop around and save a lot of money on medical expenses, publicizing prices is also expected to prompt hospitals to adjust medical costs and pricing through market competition, saving patients, employers, and insurers billions of dollars. A series of changes show that Trump's New Deal on Medicine is moving toward restructuring the U.S. health care ecosystem and lowering the burden of health care.

As the U.S. rectifies the wastefulness of healthcare resources, reduces healthcare spending, and imposes high tariffs to promote the return of the pharmaceutical manufacturing industry, it is affecting the future direction of demand in the largest single healthcare market of more than 300 million people. Under this change, it will inevitably affect the overall scale of U.S. pharmaceutical spending, pharmaceutical innovation and new changes in the healthcare supply chain in the future. The following developments are worthy of attention, respectively, under the institutional turbulence of the NIH and the FDA in medical innovation and regulatory oversight, it is expected that new medicines and innovative medical materials may gradually enter a slower era in the review and listing, but biotechnology and pharmaceutical innovation will still be the core competitiveness of the U.S. Recently, Eli Lilly's record-breaking new product, Eli Lilly, was launched on the market and has become one of the most successful companies in the world. Eli Lilly (Eli Lilly) a record $ 27 billion to increase investment in the United States, to support the United States to consolidate the status of pharmaceutical technology powerhouse determination; in the pharmaceutical supply chain, in addition to the United States itself part of the shortage of pharmaceutical products, in the U.S. trade barriers, as well as other countries tariff wars are imminent environment, coupled with the U.S. in the drugs (such as anti-cancer drugs) and medical equipment is heavily reliant on overseas supply, but also lead to a shortage of domestic medical products in the United States, and the United States of America, the United States of America, the United States of America and China, and the United States of America. Under this expected psychological situation, Siemens Healthineers has set up huge warehouses in the U.S. to alleviate the pressure of tightening supply chain costs in the future. It is estimated that in 2024, the United States imported about 200 billion U.S. dollars worth of medical products, of which Ireland, Germany and Switzerland is the United States of America's main importer of drugs, while China, India and Mexico is the United States of America's 80% prescription raw materials for the production of the country, the low and medium-order medical products such as needles, syringes, respirators, protective clothing and protective equipment, pulse oximeter, anesthesia equipment and blood pressure monitors and so on, mostly from China, tariffs in order to raise the cost of the future supply chain. Tariffs will increase the price of imported goods, change the cost of imported products, and thus weaken the low-cost manufacturing advantages of other countries, which will accelerate the shift or replacement of the pharmaceutical supply chain to U.S. domestic enterprises, or manufacturers in tariff-preferring countries with cost advantages, or non-Chinese contract manufacturers. In addition, health wearable, telemedicine, or innovative AI digital products that can improve the efficiency of U.S. healthcare and reduce medical labor are also expected to gain new business opportunities in this environment.

Changes in the U.S. pharmaceutical industry are taking place, the layout of flexible supply chain and transferable production changes are waiting to happen, as well as future tariffs to bring 20%~30% cost advantage, or subsidy strategy of the production enterprises, whether it is enough to determine the pharmaceutical manufacturing industry back to the United States of America's investment decisions will also test the wisdom of the operators, and the supply chain of pharmaceuticals to meet the opportunity to re-draw the market map, the pharmaceutical supply chain is expected to be the first to seize the business opportunities. It is expected that Taiwan's pharmaceutical and medical material companies, which have already set up plants in the U.S., will be the first to seize the business opportunities arising from the transfer of the pharmaceutical supply chain.

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