Biopharma industry eyes 2025 bounceback, grapples with uncertainty over Trump return
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SAN FRANCISCO: The biopharmaceutical industry aims to reverse last year’s drop in investor returns in 2025 but is wary of President-elect Donald Trump’s priorities on hot-button issues such as drug reform and vaccines. What can happen?
The pharma industry faced its biggest regulatory overhaul in decades with the Biden administration’s Inflation Reduction Act of 2022, which for the first time allowed the federal government’s Medicare health plan to negotiate the prices of its most expensive prescription drugs. allowed to.
“Nothing kills investment like uncertainty. The IRA created a lot of uncertainty in the sector,” Steve Yubel, head of the industry lobbying group PhRMA, said this week at the JPMorgan Healthcare Conference in San Francisco. .
PhRMA hopes the new administration will focus less on “attacks on the ecosystem” of the industry and instead seek to reduce inefficiencies that will lower costs for patients, he said. .
The first 10 Medicare-negotiated drug prices were released last August, with results largely in line with current prices after rebates and discounts.
The next 15 drugs to be named for price negotiations are due by February 1 and could be announced this week, although it is also possible that the final list could change after Trump takes office on January 20.
Last year, the Nasdaq Biotechnology Index fell 3.0 percent, compared with a 23 percent gain for the bellwether S&P 500 and a nearly 29 percent gain for the tech-heavy Nasdaq. The NYSE Arca Pharmaceutical Index rose 1.0 percent.
The contrast comes despite all-time stock price gains by obesity drug makers Novo Nordisk and Eli Lilly. Lilly ended 2024 up 31 percent, while shares of Novo, which posted unusual trial results for a next-generation weight-loss drug, fell 9.0 percent.
“Growth in the sector has been uneven. Investors assess how drugmakers deal with patent expirations,” said Roel van den Akker, pharma deals leader at PwC.
The patent is expiring.
Morgan Stanley estimates that about $175 billion of 2025 U.S. large-cap biopharma revenue — 35 percent of the total — will be off patents by the end of the decade.
To replace that revenue, drugmakers need new products, either from their own research or by acquiring companies with promising assets, but that transaction slowed significantly last year.
Life sciences mergers and acquisitions were worth about $80 billion in the year through November, less than half of the 2023 total, according to the Aqva Institute for Human Data Science. No deal closed over $5 billion last year.
Expectations that the next Federal Trade Commission chair will be more deal-friendly than Lena Khan are seen as positive for drug dealers.
On Monday, several deals were announced, including the $14.6 billion acquisition by Johnson & Johnson. Trump nominated current Commissioner Andrew Ferguson to replace Khan. Investors are less enthusiastic about some of Trump’s other high-profile nominations for top positions in his next administration.
“RFK’s views on vaccines could certainly influence some of the big pharmaceutical companies,” said Beth Neitzel, a colleague of Foley Hogue, Robert F. Kennedy Jr.’s pick to lead the Health and Human Services. Referring to, those who are clearly skeptical about vaccines.
“I think the goal will also be to find common ground. Making America healthier is what we’re all about,” Biogen CEO Chris Wehbacher said in an interview during the conference.
Pharma execs for influence
Pfizer CEO Albert Borla stressed the industry’s uncertainty in his session on a conference call with investors, but said Monday he would try to influence the environment.
“There are many people who think the risks to our industry outweigh the opportunities. There are others, among them, who think the opportunities outweigh the risks. I think we’ll see, ” he said.
“It’s hard for me to predict what’s going to happen,” J&J CEO Joaquin Duato told investors, adding that he would push policies on innovation and access with the Trump administration.
Investors are focused on the impact of government policy on drug pricing, including any changes to the IRA that could affect how quickly individual drugs become eligible for Medicare price negotiation.
Priyachandran, biopharmaceutical sector leader at Boston Consulting Group, said the changes would be difficult to make because they are written into law. “It’s unlikely that anything will change drastically in the first year,” he said.
Foley Hoag’s Neitzel said reports of Trump’s “warm and convivial” December dinner with pharmaceutical executives in Florida have given some hope. The administration is being helpful to the industry,” he said.
