President Trump signed an executive order this week aimed at reducing drug prices by 30% to 80%. However, industry analysts were disappointed as the order did not include tools such as Medicare price negotiation or a Medicare pilot program. The order requires the Health and Human Services Department to determine “most favored nation” prices for drugs and communicate them to pharmaceutical companies. If companies do not comply, the HHS Secretary will initiate rulemaking, a process that could take years and face legal challenges.
Industry trade group Pharmaceutical Research and Manufacturers of America criticized the order, stating that foreign countries not paying their fair share and middlemen driving up prices are the real reasons for high drug costs. Venture capitalists in the sector also expressed concerns about the order, stating that importing foreign price controls could hinder American innovation.
In Congress, Senator Bernie Sanders offered to introduce legislation to give Most Favored Nation pricing more teeth, while Republicans seem less inclined to support such a move. Instead, they are focusing on bipartisan proposals to rein in Pharmacy Benefit Managers.
In other news, Andrew Dudum, the cofounder of Hims & Hers, a company that sells wellness products for men and women, including hair loss and erectile dysfunction pills, became a billionaire after a recent deal with Novo Nordisk to sell the weight loss drug Wegovy. The company’s stock soared after the announcement, boosting Dudum’s net worth to $1.4 billion.
A report from Senate Democrats found that the Trump Administration cut $2.7 billion in NIH research grants, including a 31% cut to cancer research. These cuts are causing uncertainty in the industry and hindering research efforts.
In the digital health and AI sector, virtual chronic care company Omada Health filed for an IPO, reporting $170 million in revenue for 2024. However, the company is not yet profitable, reporting a net loss of $47 million last year.
In the public health and hospitals sector, wellness influencer Casey Means was nominated by Trump to be the next surgeon general, sparking controversy within his base. Northwell Health CEO Michael Dowling announced his resignation, with John D’Angelo set to replace him in October.
Overall, the healthcare industry is facing challenges and changes as it navigates issues related to drug pricing, research funding, digital health, and leadership transitions. Stay tuned for more updates on the evolving landscape of the healthcare sector.
