Just over one year into the second Trump administration, the US healthcare and life science market is navigating a steady stream of series of unprecedented policy shifts. Long defined by patients in the US having more innovative medicines available to them than anywhere else on earth, but the market’s long-criticized high prices and fragmented delivery are now firmly in the policy crosshairs. The challenge now will be balancing America’s status as the leading global source and recipient of biomedical innovation with more affordable pricing and – in an increasingly uncertain geopolitical environment – national security concerns.
IRA Negotiation Enters Its First Operational Phase
After several years of debate, and a year of attempted dismantling from the Trump cabinet, the Biden administration’s Inflation Reduction Act (IRA) has crossed a critical threshold: it is now actively shaping market prices. This marks the first time the US federal government has directly set prices for widely used branded medicines at scale. As of January 1, 2026, negotiated Maximum Fair Prices took effect for the first 10 Medicare Part D drugs, with discounts ranging from roughly 38 to 79 percent off 2023 list prices.
Drugs eligible for negotiation under the IRA are known as Qualifying Single Source Drugs (QSSDs): drugs that Medicare spends the most on that have no generic or biosimilar competition. To be considered a QSSD, a small molecule drug has to have received its first approval from the FDA at least seven years before being selected for negotiation. In the case of biologics, this time frame is 11 years.
From here, QSSDs must account for at least USD 200 million in yearly Medicare spending and cannot be orphan designated or a plasma-derived product. Drugs which have been previously selected for negotiation, are determined to have a high likelihood of facing biosimilar competition in the future or are considered small biotech products are also exempt. Under these criteria, the top 50 QSSDs are ranked and the products with the highest Medicare gross spending are selected.
Through this selection process, the first 10 drugs which will be negotiated in 2026 are BMS’s Eliquis, Boehringer Ingelheim’s Jardiance, Bayer’s Xarelto, MSD’s Januvia, AstraZeneca’s Farxiga, Novartis’ Entresto, Amgen’s Enbrel, J&J’s Imbruvica and Stelara, and Novo Nordisk’s Novolog: primarily representing therapies for chronic cardiovascular and metabolic conditions.
The significance lies not just in the discounts themselves, but in the precedent. For decades, the US stood apart from other major markets by avoiding centralized price negotiation. The IRA changes that assumption. It also does so as part of a broader redesign of Medicare Part D, including caps on patient out-of-pocket spending, meaning pricing reform is being paired with affordability reform. While just taking effect, the program is already expanding in scope. A second set of 15 Part D drugs will be subject to negotiated prices in 2027, while an additional 15 drugs, including those reimbursed under Part B, have been selected for implementation in 2028.
As the number of negotiated products grows, the IRA is beginning to reshape expectations around long-term pricing stability in the US market. The US is no longer an outlier market untouched by direct price intervention; rather, manufacturers will have to reevaluate lifecycle strategies, launch pricing, and portfolio prioritization in response to a system where high-revenue drugs will inevitably face government-negotiated prices.
BIOSECURE Drives Supply Chain Realignment
The BIOSECURE Act represents a different kind of intervention – rooted in national security rather than pricing – but with equally profound implications. Signed into law in December 2025, the law restricts federal agencies and federally funded entities from working with “foreign biotechnology companies of concern”. In the original proposal, the bill pointed explicitly to several companies including WuXi AppTec, BGI, MGI, and Complete Genomics, and WuXi Biologics. However, the final version of the legislation does not list companies specifically, but rather outlines a list of criteria for concern such as any company on the 1260H list (a list of companies identified by the US Department of Defense as linked to the Chinese military); and companies that are subject to the control or direction of foreign adversaries (currently noted as North Korea, China, Russia, and Iran).
The law reflects broader geopolitical tension and concern that biotechnology companies “under the control of a foreign adversary pose a risk to national security based on its research or collection of genomic information.” As per the legislation, the first step of enactment calls for the Office of Management of Budget to publish an initial list of companies falling into the criteria above, followed by the issuance of an implementation guidance, amendments to federal acquisition regulations, and a phased application of procurement restrictions. Although there may not be an immediate disruption for private industry, organizations that work with federal agencies or receive federal funding may consider evaluating their existing supply chains.
Biosimilars Gain Momentum Amid Regulatory Shift
After years of low uptake due to patent thicketing by Big Pharma, PBM rebate dynamics, and a lack of regulatory pathways, the US biosimilars market may finally be reaching a turning point. In 2025, the US FDA approved 18 biosimilars across 10 reference products, representing a 30 percent increase in total approvals. More significantly, recent regulatory guidance has begun to reduce development complexity.
New FDA guidance issued in late 2025 and early 2026 signals a shift toward a more pragmatic approach. Developers may no longer be expected to conduct extensive comparative efficacy studies by default, and requirements around pharmacokinetic (PK) testing are being streamlined where scientifically justified. These changes aim to reduce both the cost and duration of biosimilar development.
This regulatory shift coincides with a wave of upcoming biologic patent expiries. As a 2025 IQVIA report on “the biosimilar void” in the US shows, more than 100 biologics are expected to lose exclusivity over the next decade, representing a USD 232 billion market opportunity for biosimilars. At the same time, payer appetite for cost savings is increasing, driven by both public policy pressure and rising healthcare expenditures. Biosimilars, already a key tool in lowering prices in regions like Europe, may finally be set for a boom in the US.
Direct to Patient Models Expand Across Therapeutic Areas
Distribution models are also undergoing transformation, with direct-to-patient (DTP) platforms gaining traction as an alternative access channel due to increased policy support. Following the 2025 executive order on Most Favored Nation pricing (an attempt to tie prices for drugs to the lowest paid in other developed countries), the highly publicized TrumpRx was launched in 2026 – promising patients direct access to large discounts on drugs from companies that have reached MFN pricing agreements. AstraZeneca, Eli Lilly, EMD Serono, Novo Nordisk, and Pfizer were the first five manufacturers to reach deals.
At the same time, industry-led platforms have expanded. Initiatives such as LillyDirect and PfizerForAll launched in 2024, and AmgenNow and AstraZeneca Direct in 2025, are integrating telehealth, prescribing, and fulfillment into unified patient-facing ecosystems. According to manufacturers, these platforms aim to streamline access and reduce reliance on intermediaries such as PBMs – a stakeholder group unique to the US that is often labeled as one of the contributors of the high cost of healthcare. These models are not replacing existing channels outright and so far have been focused in therapeutic areas where cash-pay or simplified pricing models are viable, such as obesity, migraine, and primary care conditions.
What ultimately remains to be seen is whether the parallel pathways introduced by DTP platforms will result in a more streamlined, patient-friendly experience through holistic platforms like TrumpRx, or greater fragmentation of access, with patients having to purchase their medications through manufacturer platforms on an individual basis.
PBM Reform Targets Rebate-Driven Pricing Structures
If IRA negotiation represents direct government intervention in pricing, then PBM reform targets the mechanics of how those prices are formed. The 2026 Consolidated Appropriations Act introduces significant changes to how PBMs operate, particularly in Medicare Part D and employer-sponsored plans. Key provisions include mandatory rebate pass-through, enhanced transparency requirements, and a shift toward flat-fee compensation models.
In the ongoing debate to signal accountability for the US’s hefty drug price tag, manufacturers point to PBMs – accusing the intermediaries of being incentivized to negotiate larger rebates tied to higher list prices. By delinking PBM compensation from drug prices, the new framework aims to realign incentives and reduce upward pressure on list prices.
On the other side of the table, PBMs note that the pharmaceutical industry themselves set prices and strive to block competition. As stated in a recent blog post from PCMA, the Pharmaceutical Care Management Association, “PBMs have evolved over the past several years and offer a wide range of innovative cost-savings and clinical services to the patients and employers they serve. Now that PBM reform has been achieved, Congress should stop Big Pharma from blocking lower-cost medicines and end their gaming of the patent system.”
While implementation will occur over several years, with major long-held provisions taking effect between 2028 and 2029, the reform reflects long held scrutiny of PBM practices and their role in shaping formulary access, pharmacy reimbursement, and patient costs.
