As 2025 reaches its midpoint, the healthcare policy landscape is undergoing significant changes. Themes such as drug pricing and regulatory reform continue to be relevant, but the speed and complexity of these developments are unprecedented. For organizations in biopharma, MedTech, and nonprofit healthcare sectors, active management of public policy has become essential.
Executive actions have been prolific this year, with over a dozen executive orders impacting healthcare. These orders focus on deregulation, domestic production, and pricing pressure. One notable action is the return of the Most Favored Nation (MFN) directive, which instructs the Department of Health and Human Services (HHS) to ensure drugmakers match their lowest prices offered in developed countries. Although voluntary in nature, this order outlines potential consequences like rulemaking and trade actions if compliance is not met.
Additionally, tariffs now target active pharmaceutical ingredients (APIs), syringes, and diagnostic tools to encourage U.S. manufacturing while creating uncertainty for global sourcing and pricing. There is also an increased enforcement of hospital and insurer price transparency with calls for changes to site-neutral payments and Medicaid block grant flexibility.
A significant executive order mandates the repeal of ten regulations for every new one introduced. This “10-for-1 Rule” gives the Office of Management and Budget (OMB) broad authority to enforce cuts across agencies such as HHS, FDA, and CMS.
Within federal agencies like HHS, structural changes are affecting policy development and enforcement. Workforce reductions have impacted review timelines at agencies including NIH, CMS, and FDA. The Make America Healthy Again Commission has published a report influencing federal priorities in areas like fertility and rare diseases.
FDA Commissioner Marty Makary’s listening tour seeks input from industry leaders on modernizing regulatory frameworks to support innovation. Meanwhile, Elsa—FDA’s AI tool—is being used administratively despite concerns about data security from some companies.
On Capitol Hill, Congress shows bipartisan interest in addressing cost issues related to drug pricing. Proposals include reforms targeting pharmacy benefit managers (PBMs) with a focus on transparency and client interests. The “Pill Penalty” suggests inflationary penalties for price increases beyond Medicare limits.
Reforms around program eligibility for 340B discounts face pushback from hospitals while legislation reintroduced aims at closing gaps between FDA approval and Medicare coverage for medical devices.
Looking ahead to the second half of 2025:
– Regulatory rollbacks under the “10-for-1” directive will likely focus on recent guidances.
– Clarity or limitations may emerge regarding how FDA’s AI tools interact with company data.
– User fee negotiations require early preparation by stakeholders.
– MAHA Commission’s recommendations are expected by August 12.
– More executive orders concerning health benefits design could be forthcoming.
Rachel Gartner Clark emphasizes readiness for user fee discussions or PBM reforms: “Let us know how we can help.”
Rachel Gartner Clark serves as Managing Director at Narrative with extensive experience in healthcare public affairs: “Want to continue the conversation? Email me directly at rclark@narrativestrategies.com.”
