At Asembia 2025, Luke Greenwalt, vice president at IQVIA, presented a sweeping overview of the evolving health care and pharmaceutical landscape, highlighting critical trends for payers as the industry enters a period of accelerated change in 2025 and beyond.

Greenwalt opened with a clear message: the health care sector is operating under extraordinary pressure driven by a potent mix of new federal policies, economic recalibrations, and structural shifts within pharmaceutical commercialization. The second Trump administration’s executive orders addressing drug pricing, pharmacy benefit manager (PBM) reforms, and broader health care policy have added new urgency for industry stakeholders to adapt.

“We’re seeing major reforms happen within the FDA and other regulatory bodies,” said Greenwalt. “Those will have an influence on the industry as we move forward over the next few years.”

Elections, Policy, and Verticalization: A New Regulatory Era

Greenwalt emphasized that reforms years in the making have gained significant momentum. Key developments include:

• Major reshoring of pharmaceutical manufacturing with more than $200 billion in announced investments;

• Downsizing across federal agencies, including a 20 000-person reduction at the US Department of Health and Human Services (HHS);

• Heightened regulatory scrutiny of PBMs following Federal Trade Commission (FTC) investigations, with bipartisan legislative efforts (eg, HR 2880 and HR 10362) likely to advance in the coming months.

Vertical integration among PBMs and health plans has fundamentally reshaped drug market dynamics. Greenwalt noted that the shift from a rebate-focused PBM model to specialty pharmacy and group purchasing organization (GPO) profits has profound implications for drug adoption and biosimilar competition, highlighting the example of adalimumab biosimilars' struggles until white-label strategies unlocked broader market erosion.

Inflation Reduction Act: Early Lessons and Growing Challenges

Midway through 2025, the Inflation Reduction Act (IRA) has already driven significant structural changes:

• Patient out-of-pocket costs have dropped in Medicare Part D catastrophic coverage, fueling a 50% year-over-year jump in oncology drug utilization.

• Payers now face a quadrupled liability for specialty drug costs under the new benefit design.

• The next wave of negotiated drugs, including blockbuster products such as Ozempic and leading oncology therapies, will reshape payer strategy.

Greenwalt cautioned that future shifts, such as closing the “pill penalty” to align small molecule and biologic negotiation timelines, could further impact research and development (R&D) investment decisions, favoring rare and orphan indications while discouraging broad-population small molecule development.

Trade, Tariffs, and Global Research Dynamics

Trade wars, particularly with China, are now deeply affecting pharmaceutical innovation. Greenwalt highlighted a rise in Chinese oncology clinical trial starts and noted that tariffs on pharmaceutical imports—especially active pharmaceutical ingredients (APIs)—pose major risks for generic drug margins and could destabilize fragile supply chains.

Significant investment in US-based manufacturing is underway, but Greenwalt warned that the downstream economic impacts of tariffs could be substantial, particularly for wholesalers and pharmacies operating on razor-thin margins.

Launch Dynamics and Margin Compression: Boom or Bust?

The biopharmaceutical launch environment is increasingly divided. Greenwalt posed a question to the audience about whether they believe the pharmaceutical industry is entering a “boom” or “bust” cycle, indicating that the industry is experiencing a bit of both. Massive successes, such as glucagon-like peptide-1 (GLP-1 therapies (eg, tirzepatide) and respiratory syncytial virus (RSV) vaccines, have driven unprecedented first-year revenues. However, most launches struggle, with a dramatic fall-off in persistence rates. Greenwalt cited a specialty launch with only 4% patient persistence at 12 months.

Greenwalt also noted that the industry has seen a significant decrease in products exceeding $100 million gross sales within the first year of launch. Between 2015 to 2019, 1 in 5 drugs reached $100 million within the first year of sales, whereas from 2020 to 2024, only 1 in 10 drugs reached that milestone.

Meanwhile, margin erosion across retail, specialty, and medical products cost the industry an estimated $9 billion year-over-year from 2023 to 2024. The 340B program continues to expand, providing critical revenue streams for hospital systems but drawing attention from policymakers aiming to recalibrate Medicare reimbursement models.

Strategic Imperatives for Payers

In closing, Greenwalt urged attendees to recognize health care as a strategic sector of the US economy, supporting global innovation and domestic economic strength. As political, regulatory, and economic forces reshape the landscape, payers must prepare for:

• Ongoing legislative and executive action targeting PBMs, pricing models, and 340B;

• Further economic pressure as reshoring and tariffs influence drug supply and costs;

• Potential midterm innovation gaps as R&D pipelines shift in response to evolving market incentives.

Greenwalt’s final message implored health care stakeholders to champion stability, sustainability, and smart adaptation to safeguard the future of the US health care system.

Reference

Greenwalt L. Entering a brave new world: the life science industry in 2025. Presented at: Asembia 2025; April 28, 2025; Las Vegas, NV.