Trump Formally Inaugurated: Beyond the Known, What Variables Remain?

• Trump is known for his unconventional approach, making upcoming policies less predictable.
• Given the Inflation Reduction Act (IRA) aligns with Trump's goal of lowering healthcare costs, it is highly likely to be continued and optimized.
• There may be some reforms in U.S. public health institutions, but no earth-shattering changes are expected.
• Compared to the Biosecure Act, Chinese pharmaceutical companies should pay closer attention to supply chain issues and restrictions on cross-border data flows.

What Does Trump’s Return to the White House Mean for the U.S. Biopharma Industry?

“From his previous term's policies on healthcare and his campaign responses and promises this time, we can identify clues such as reforming public health institutions, reshaping federal healthcare plans, and reducing high healthcare costs,” said Wang Yin, an attorney at JiaYin Law Firm, USA.

According to Wang, Trump's impact on the industry primarily comes through appointing key personnel in related agencies, including the Secretary of Health and Human Services (HHS), FDA Commissioner, CDC Director, and CMS Administrator. Policy changes largely depend on the individuals in these positions.

“Compared to previous U.S. presidents, Trump tends to make grandiose statements with limited follow-through and often acts unpredictably. This makes the next four years of pharmaceutical policies less predictable,” said Wang.

Katherine, a senior attorney at the well-known U.S. law firm Ropes & Gray, shares a similar view: “Trump's unpredictability means policy uncertainty remains high.”

Four Key Focus Areas in Trump 2.0

1. Less government regulation and weaker antitrust reviews, facilitating domestic mergers and acquisitions.
2. Broader healthcare coverage while aiming to reduce healthcare costs.
3. Continued focus on price controls, aligned with Trump’s goal of lowering patients' healthcare burden.
4. Encouraging more companies to manufacture in the U.S. (Made in America) to reduce reliance on foreign medical supply chains.

Currently, compared to issues like trade, immigration, and the economy, healthcare policies appear to be a lower priority for Trump’s term.

According to Fierce Pharma, Mike Perrone, a biotechnology expert at investment bank Baird, stated in a research report: "Given Trump's focus on matters outside of healthcare and his more hands-off approach to government regulation, the life sciences sector is unlikely to face significant changes—at least not for now."

Will IRA Be Repealed? Unlikely

The Inflation Reduction Act (IRA), implemented in January 2023, has drawn widespread attention. It aims to reduce Medicare spending by enabling drug price negotiations, capping price increases, and lowering payment rates.

“The IRA was passed before the midterm elections with Vice President Harris casting the decisive vote. Whether the new administration will proceed with it without revisions is uncertain,” Wang said.

Wang noted that large pharmaceutical companies strongly oppose the IRA due to its focus on drug price negotiations, while Trump favors targeting pharmacy benefit managers (PBMs) for their rebate practices. Trump has advocated for eliminating rebates to promote transparency.

"Based on Trump's style, I don't think he would follow through on implementing a law left by the previous president in a conventional way," said Wang Yin.
In a report to clients after the November 5th election, analysts at the well-known Wall Street investment bank Jefferies unanimously agreed that efforts to repeal the IRA are unlikely to succeed. This aligns with Katherine's perspective.
"In the U.S., high drug prices are an important issue for the public. Based on Trump's past positions and his appointment of the CMS administrator, the policy trend of the IRA is unlikely to be reversed. The only uncertainty lies in how the law will apply to different products, and to what extent the government will have the power to set drug price caps and payment standards. These details will require further observation," Katherine said.

The most likely scenario is that the IRA will continue to be enforced, though individual provisions may be revised and adjusted.

Steve Usdin, a senior reporter for BioCentury in Washington, has written that leaders in the biopharmaceutical industry believe that the Republican-controlled Congress will incorporate reforms to IRA drug price negotiations into the 2025 tax legislation. This could include expanding the exemption for orphan drugs from price negotiations to products with multiple indications. It may also extend the 9-year grace period for small-molecule drug price negotiations (13 years for biologics) to resolve the "pill penalty" issue in the IRA.

Major Overhauls for Public Health Institutions?

U.S. public health institutions are facing both opportunities and challenges, especially the highly scrutinized FDA.
According to BioCentury, Trump 2.0 has the opportunity to make the FDA stricter, more flexible, and responsive to patients, while quickly adapting to scientific advancements. There's also the chance to significantly reduce the cost of developing biosimilars without compromising safety, which could help establish a stronger generic drug industry.
However, the greatest threat is intangible yet real. For instance, public trust in the FDA may continue to erode, and people may believe small-Kennedy's claims about institutional corruption. Experienced personnel may leave, affecting the FDA's ability to review medical products. Furthermore, the long "cooling-off period" set for FDA officials' departure might make it difficult to recruit newcomers.

Image source: BioCentury

Similarly, the NIH may face major reforms. It is seen by the industry as a key institution for funding basic science, but Trump has expressed dissatisfaction with its structure and efficiency, repeatedly proposing significant cuts to the NIH budget during his first term.
Trump's nominee for HHS Secretary, small-Kennedy, vowed to stop NIH funding for infectious disease research within eight years, redirecting resources to chronic disease prevention and other areas he believes are under-researched. He also pledged to fire 600 NIH employees on his first day in office. In another article, BioCentury bluntly pointed out that compared to the damage caused by severely impairing the FDA, devastating the NIH, and dismantling the CDC, Trump's "three-pronged approach" (resolving IRA issues, reaching tax agreements, and implementing more lenient antitrust policies) would seem insignificant.
Wang Yin holds a slightly different view: "U.S. public health agencies may undergo some reforms, but it is unlikely that there will be earth-shattering changes. From a legal perspective, to ensure the stability and continuity of administrative agencies, firing federal employees is not easy. Clear reasons for incompetence need to be provided, and they have the right to appeal. Therefore, it remains to be seen how much the new government can truly shake up these health agencies."
Katherine also believes these public health institutions may not undergo significant reforms, but based on the style and rhetoric of the key appointees nominated by Trump, they don't appear to be very friendly toward the pharmaceutical industry. For example, small-Kennedy is an anti-vaccine advocate and believes that FDA budget usage is unreasonable, with too much of the operational cost coming from user fees.
"These newly nominated officials are not long-time political figures or seasoned technocrats who have worked their way up through U.S. public health institutions, so they are likely to have some unexpected ideas or initiatives," she said.

Key Concerns for Chinese Pharma Companies

For China’s biopharmaceutical industry, the developments surrounding the Biosecure Act over the past year have undoubtedly drawn significant attention. However, the act was not included in the 2025 National Defense Authorization Act (NDAA), which could have expedited its path to becoming law.
According to Wang Yin, the fact that the act wasn’t included in the 2025 NDAA was not surprising. During the House voting stage, Republican Representative Michael Gallagher and others tried to incorporate it into the NDAA but failed. In fact, more than 1,300 bills were proposed for inclusion in the 2025 NDAA, but only around 350 were ultimately included, primarily focusing on U.S. military preparedness and national security. This indicates that, from Congress’s perspective, the Biosecure Act's importance and urgency in terms of national security are not as high as other priorities.
“It remains uncertain whether the new Congress will continue pursuing bills proposed by the previous session. New legislators may insist on advancing their own agendas and proposals,” she noted.
However, some believe the likelihood of the Biosecure Act passing is higher.
“The Biosecure Act is a bipartisan initiative supported by both chambers of Congress. Its passage during the new congressional term is almost inevitable,” Katherine told PharmaTalk. Furthermore, she believes the final version of the act is unlikely to differ significantly from the draft currently under consideration.
Nielsen Hobbs, an analyst at the globally renowned consulting firm Citeline and editor of Pink Sheet, publicly stated, “Trump’s victory has introduced considerable uncertainty for the biopharmaceutical industry, but one thing is certain: the Biosecure Act now seems more likely to pass.”
Hobbs explained that the next Congress's primary focus will be on tax and healthcare legislation, and the goals of the Biosecure Act align closely with the incoming Republican majority’s agenda. Trump has previously promised to significantly increase tariffs on Chinese imports as part of his “America First” agenda to promote the reshoring of manufacturing.
Yalin Zhang, a partner at Jaffa Investment Fund, expressed a similar viewpoint in an article published in PharmaTalk. He predicted that Trump would firmly implement the Biosecure Act because its primary goal is to encourage the reshoring of U.S. manufacturing. The industrial hollowing out of the pharmaceutical sector, particularly with the concentration of major CDMO supply chains in China, is something Trump cannot accept.
As some public opinion suggests, national security is merely a pretext; the real purpose of the Biosecure Act is to address supply chain issues. Supply chains inherently introduce competition and take away some American jobs. Therefore, it will be crucial to exercise caution when investing in building factories or acquiring companies in the U.S.
Another policy shift worth noting for Chinese pharmaceutical companies is the U.S. Department of Justice's new regulation, issued at the end of December 2024, titled Preventing Countries of Concern from Accessing Large-Scale Sensitive Personal Data of Americans and U.S. Government-Related Data. This new rule targets six countries, including China, and restricts transactions involving six types of “sensitive personal information data” and two types of “U.S. government-related data.”
“There is now a barrier to cross-border data flows,” Wang Yin remarked.
However, she also highlighted certain exceptions permitted under the new regulations, such as research and regulatory submissions for drugs and medical devices in both China and the U.S.; activities related to the global expansion of innovative drugs, such as intellectual property licensing and co-development with major pharmaceutical companies; and the establishment of new companies (NewCos) with investment funds. These activities are not impacted by the new rule.
“Given the exceptions, I personally believe the impact of cross-border data flow restrictions on Chinese pharmaceutical companies is not as severe as initially anticipated,” Katherine added.

Reference

Trump 2.0 presents opportunities, threats https://www.biocentury.com/article/654295/trump-2-0-presents-opportunities-threats

Giving RFK Jr. control of HHS would be disastrous: an Editor’s Commentary https://www.biocentury.com/article/654203/giving-rfk-jr-control-of-hhs-would-be-disastrous-an-editor-s-commentary

Biopharma status quo 'likely to persist' under Trump 2.0, though changes to IRA, FTC and more could be on the way: analyst https://www.fiercepharma.com/pharma/biopharma-status-quo-likely-persist-under-trump-20-though-changes-ira-ftc-and-more-could-be

What might a Trump administration mean for the Biosecure Act? https://www.pharmavoice.com/news/trump-congress-biosecure-act-china/733414/