President Donald Trump's first 100 days back in office have brought sweeping changes to the healthcare landscape, with tariff impositions and significant workforce reductions reshaping the industry's operational environment.
Escalating Tariffs Impact Pharmaceutical Supply Chain
On April 2, the Trump administration announced a 10% tariff on imports from nearly all countries, which quickly escalated into a full-blown trade war. By April 9, the U.S. had imposed a 125% tariff on Chinese imports, prompting China to retaliate with an 84% tariff on all U.S. goods, up from 34%.
Unlike previous trade disputes, the current conflict offers no exemptions for pharmaceutical products. According to GlobalData analysis, these tariffs are likely to disrupt drug development costs and pricing structures as they increase import costs for raw materials and active pharmaceutical ingredients.
"This is probably the largest economic shock that we've seen since the 1970s," noted Harvard Law experts examining the administration's tariff policies.
The impact is particularly significant given China's dominant position in pharmaceutical manufacturing. Industry analysts warn that the "trickle-down" effect may make the U.S. less attractive for clinical trials, potentially driving research to countries where investigational drugs can be produced more affordably.
Medical device manufacturers are also feeling the pressure. Companies like Intuitive Surgical have warned investors about escalating tariff impacts, while others such as Retractable Technologies have trimmed their workforce in anticipation of challenges. Thermo Fisher Scientific has taken a different approach, pledging $2 billion in additional U.S. manufacturing investment to counter tariff effects.
The DOGE Effect: Deep Cuts Across Health Agencies
The administration's Department of Government Efficiency (DOGE) initiative has resulted in dramatic staff reductions across federal health agencies. Under Health and Human Services (HHS) Secretary Robert F. Kennedy Jr., the combined workforce of agencies including the FDA and CDC has been reduced from 82,000 to approximately 62,000 full-time employees.
These cuts have raised concerns among healthcare experts about agencies' ability to fulfill their core functions, including completing premarket reviews of drugs and medical devices and coordinating effective responses to potential disease outbreaks.
The reductions have also affected research funding, potentially limiting the ability of academic organizations and early-stage companies to advance drugs from preclinical settings into clinical trials. Some clinical trials sponsored by the U.S. Agency for International Development (USAID) have already been suspended until alternative funding can be secured.
"Unlike the first Trump administration, which prioritized health care reform through repeal-and-replace efforts, this time health care has not been a top agenda item," explained Emily Murray, partner at Tarplin, Downs & Young, during Asembia's AXS25 Summit.
Drug Pricing and Medicare Negotiations
On April 16, President Trump signed an executive order on drug pricing, providing the first comprehensive look at the administration's approach to pharmaceutical costs. The order aims to enhance the Medicare Drug Price Negotiation Program by increasing transparency, targeting high-cost medications, and preserving pharmaceutical innovation while addressing anticompetitive practices.
The administration has also signaled it views foreign pharmaceutical manufacturing as a national security concern, prompting the Department of Commerce to launch a Section 232 investigation into pharmaceutical imports. The outcome of this investigation, expected on May 7, could have significant implications for the industry.
Ashley Flint, a principal in the policy practice at Avalere Health, noted the administration is trying to take "a more thoughtful approach on what are the policies, what are the tariffs, and the levers that they can pull so that they're not just increasing costs on patients and having access issues."
Budget Reconciliation and Medicaid Reform
Congress has begun the budget reconciliation process, which allows for passing tax, spending, and deficit-related measures with a simple Senate majority. The House is combining tax cuts, spending reductions, and debt ceiling increases into a single package.
The House Freedom Caucus has demanded at least $1.5 trillion in spending cuts to offset the cost of extending Trump-era tax cuts, plus raising the debt ceiling by $4 trillion. Committees like Energy and Commerce are tasked with finding approximately $880 billion in savings, with substantial Medicaid reforms expected.
Inflation Reduction Act Implementation
The Trump administration is positioned to significantly influence the implementation of the Inflation Reduction Act's (IRA) drug pricing reforms for 2026, 2027, and 2028. While Maximum Fair Prices (MFPs) for 2026 have been announced, operational challenges remain.
"There are definitely still some outstanding operational and technical questions as it relates to how manufacturers will be making those MFPs available to dispensing entities," said Flint.
For the 2027 drug cohort, the administration has signaled an intent to drive even lower MFPs and greater Medicare savings compared to the previous administration's results. Looking ahead to 2028, initial guidance is expected soon, marking the first time that Part B physician-administered drugs will be eligible for selection.
As the administration moves beyond its first 100 days, the healthcare industry continues to adapt to these significant policy shifts, with pharmaceutical companies, medical device manufacturers, and healthcare providers all navigating a rapidly changing regulatory and economic landscape.
