Donald Trump’s return to the presidency in 2025 brings a healthcare agenda focused on deregulation, reduced federal spending, market competition, and policy realignment. Changes are inevitable for the federal health agencies, and the policies they regulate given the recently announced leadership nominations. However, Trump has largely refrained from detailing specific changes for the industry, hence much attention has been focused on the views, of his appointees. For Swedish companies, these insinuated policies present a mix of opportunities and challenges, from potentially accelerated Food and Drug Administration (“FDA”) approvals to likely disruptions in Medicaid and Affordable Care Act (“ACA”) frameworks.
Deregulation and FDA streamlining
One of the administration’s main healthcare reforms involves streamlining FDA approval processes for drugs and devices and limiting the entanglement between industry and the agency. However, initial delays may arise as leadership nominations signal potential staff layoffs and increased scrutiny on drug safety. Swedish medical and pharmaceutical companies seeking entry into the US market should continue to follow the formal approval process while anticipating possible delays.
Implementation of tariffs
Potential tariff increases could significantly impact Swedish companies. Larger firms with US-based manufacturing may navigate these changes more effectively, while smaller companies reliant on Swedish production face greater vulnerabilities. Given the intricate supply chains in medtech and life sciences, even minor policy shifts could lead to reduced export volumes or a deprioritisation of the US as a market.
Restructuring of ACA and Medicaid, while preserving Medicare
In 2024, around 21 million Americans obtained health insurance through the ACA. The majority received subsidies on their premiums through the Inflation Reduction Act, which led to increased enrolment. These subsidies are set to expire at the end of 2025 with more than 15 million people potentially being impacted. If the subsidies aren’t extended, the Congressional Budget Office (“CBO”) estimates that nearly four million people will lose their coverage in 2026 because they won’t afford it, and those who maintain coverage will likely pay higher premiums. The CBO estimates that permanently extending ACA subsidies would cost USD 335 billion over 10 years, a figure misaligned with the Republican vision of healthcare reform and reduced federal funding. The future of the ACA remains uncertain, with Trump indicating he would consider changes if a less expensive alternative is proposed.
Medicaid, the third-largest programme, accounted for over USD 600 billion in spending in 2023, according to the CBO. This makes it a likely target for cuts, potentially reducing household access to health benefits. Administered to states under broad federal guidelines, Medicaid spending and programmes vary widely. Proposed changes could include work requirements for recipients or caps on federal funding to states.
Medicare, by contrast, particularly Medicare Advantage (plans offered through private insurers), may see significant growth. Trump has pledged to protect Medicare, and shares of insurers like UnitedHealth Group, Humana, and CVS Health rose by as much as 10% following the election results, driven by expectations of increased payments to private Medicare providers. However, Medicare Advantage plans face scrutiny for practices such as denying health claims and requiring patients to obtain “prior authorisation” for basic procedures.
Reducing drug pricing
During his first term, Trump floated several policies to lower drug costs and positioned himself as a proponent of reducing drug prices. Currently, the Inflation Reduction Act, enacted under the Biden Administration, grants Medicare the authority to negotiate drug prices directly with manufacturers, focusing on medications lacking generic or biosimilar competition.
In August, after months of failed litigation from pharmaceutical companies, the Centers for Medicare & Medicaid Services (“CMS”) announced negotiated prices for the first ten medications, set to take effect in 2026. These prices reflect savings of 38% to 79%, compared with 2023 list prices, and the agency anticipates USD 7.5 billion in savings in the first year. CMS can continue to select up to 15 additional drugs for negotiation in 2027 and another 15 in 2028.
It remains unclear whether the incoming Trump administration will maintain Medicare’s negotiation authority under the IRA or propose alternative measures to address the persistently high cost of drugs in the US.
Abortion ban
Trump has stated that decisions on abortion restrictions should remain at the state level. Before the election, he confirmed that he would not sign a national abortion ban. In the 2024 election, reproductive rights were on the ballot in ten states, with seven – Arizona, Colorado, New York, Maryland, Missouri, Montana, and Nevada – passing amendments to enshrine abortion rights in their constitutions. Meanwhile, similar amendments failed in Florida, Nebraska, and South Dakota, leaving current restrictions in those states unchanged.
A discussion of the evolving landscape would be incomplete without mentioning the key individuals nominated to lead critical institutions overseeing a USD 1.7 trillion budget and over 80,000 researchers, scientists, and other officials. These appointments will play a significant role in shaping public health and related policies under the new administration.
The Department of Health and Human Services (HHS)
Robert F Kennedy Jr has been nominated to lead the HHS, overseeing key agencies such as the FDA, Centers for Disease Control and Prevention (CDC), National Institutes of Health (“NIH”), and the CMS. These agencies are critical for Swedish companies seeking entry into or expansion within the US market.
Kennedy, a known vaccine sceptic and critic of the pharmaceutical industry, has pledged to “Make America Healthy Again,” creating uncertainty about his policy direction. Speculations include prioritising unhealthy diets, removing certain food additives, regulating drugs and vaccines, and addressing the chronic disease epidemic by returning to evidence-based science. His interest in stem cell injections and psychedelics, alongside his call to ban pharmaceutical advertising on TV, signals further changes to come.
Kennedy’s controversial views have raised concerns about disruptions in federal health programmes. Following his nomination, major vaccine producers such as Pfizer, GSK, and Sanofi saw their stocks decline, reflecting market unease. For Swedish pharmaceutical and medical device companies, this could mean challenges tied to regulatory instability. However, firms focusing on chronic diseases and natural health alternatives may find opportunities in the shifting landscape.
Additionally, the US remains the world’s largest funder of global health programmes, spending USD 12.3 billion in 2024, according to the Kaiser Family Foundation (KFF). Experts fear Kennedy and Trump could terminate US support for the WHO, a move that would have significant global repercussions, given the US’s role as a leading funder.
The Food and Drug Administration
Trump has nominated Martin Makary – a pancreatic surgeon, professor at Johns Hopkins University, and Chief Medical Officer at telehealth platform Sesame – to head the FDA. Dr Makary is regarded as one of Trump’s least controversial appointments, with cautious optimism expressed by industry leaders and stakeholders.
Dr Makary’s priorities appear to align with those of Kennedy, focusing on tackling chronic disease, regulating pesticide use in foods, and addressing the perceived overreach of pharmaceutical companies in influencing regulators. He has also voiced criticism of certain covid-19 pandemic measures, including vaccine mandates. The FDA is responsible for the safety and effectiveness of prescription drugs, vaccines, and other medicinal products, as well as overseeing most foods and cosmetics.
Centers for Disease Control and Prevention
The CDC protects Americans from public health threats and manages disease outbreaks. Dave Weldon, an internal medicine physician and former Florida congressperson (1995-2009), is known for his scepticism about the safety of some vaccines and for being a founding member of the Congressional Autism Caucus. He also worked to ban thimerosal, a mercury-based preservative, from vaccines.
Critics warn that if Kennedy and Weldon are confirmed, vaccine perceptions and administration could shift, potentially reducing vaccination rates across the country.
National Institutes of Health
Dr Jay Bhattacharya, a health economist and physician at Stanford University, has been nominated to lead the NIH. Dr Bhattacharya is known for his opposition to pandemic lockdowns and vaccine mandates.
The NIH, the nation’s premier medical research agency, operates with a USD 48 billion budget. Kennedy has suggested plans to reduce the NIH’s headcount and redirect funding towards addressing chronic diseases, shifting away from drug development and infectious disease research.
Centers for Medicare and Medicaid Services
Trump’s pick for CMS is Dr Mehmet Oz. Dr Oz is famously known for his talk show of the same name, which he hosted for 13 years. He is also a wellness and lifestyle influencer. CMS provides healthcare coverage for more than 160 million people. The agency also sets Medicare payment rates for hospitals, doctors, and other providers. Dr Oz has supported expanding Medicare Advantage, a hint of more privatisation of the industry.
Considerations for Swedish companies
Trump’s proposed healthcare policies focus on deregulation and market competition, creating uncertainties in public health funding and regulatory frameworks. The nominated appointees will shape policies that will influence healthcare and life sciences in the US for years to come. Swedish companies must adopt flexible strategies to seize opportunities while managing risks. With limited information available on the full impact of these changes, Swedish companies should consider the following:
- Understand policy impacts: Identify which policies and programmes could affect your patient population to refine your market entry or growth strategy.
- Recognise shared uncertainty: Physicians, providers, and agencies are navigating unknowns. They are also trying to make sense of what is to come; expect delays as they adapt to the new landscape.
- Engage with customers: Maintain close relationships with customers, hospitals, and patients as changes are implemented. Understand their “new normal” and adapt to evolving needs and adjust your offerings to stay relevant.
- Prepare for multiple scenarios: Adopt a wait-and-see approach while planning for best-case, worst-case, and status-quo outcomes. This ensures readiness for various potential changes so you are prepared for what might come.
- Stay informed: Monitor policy developments closely. Significant shifts are expected soon after Trump takes office on 20 January 2025.
