How Can Pharma Move Forward?
The return of the Trump administration has the potential to significantly impact the U.S. pharmaceutical industry. Pharma leaders should brace for change.
- Regulatory shifts: The Supreme Court's move away from Chevron deference may lead to inconsistent FDA regulation interpretations across states, complicating areas like off-label marketing and drug approvals.
- Rare diseases and advanced therapies: Continued focus may incentivize R&D but increase scrutiny on orphan drug designations and pricing.
- Domestic manufacturing: "America First" policies could reshape supply chains and production costs.
- International operations: Temporary pause on Foreign Corrupt Practices Act enforcement may affect compliance strategies.
- Research priorities: Increased focus on biosecurity and preventive healthcare could influence product development and marketing strategies.
These challenges are likely to impact core industry aspects—from R&D to the supply chain—and may even significantly reshape the landscape of the U.S. pharmaceutical industry. This blog series covers the five key areas of impact, addressing ways that policy shifts are creating unprecedented challenges while simultaneously opening doors to strategic opportunities for companies willing to adapt.
The pharmaceutical landscape is changing—and it’s happening quickly. Sweeping policy shifts and landmark court decisions are fundamentally reshaping the regulatory environment, creating both strategic risks and untapped opportunities for industry leaders.
The coming months will separate market leaders from followers. The distinction will come down to a willingness to adapt.
So, how do you position your organization to capitalize on policy changes rather than simply reacting to them? Through proactive practices. Actions like scenario planning, investing in talent management, refining market strategies, and reimagining compliance as a competitive advantage will enable companies to navigate uncertainty and seize opportunities their competitors miss.
Part one of this series details three critical shifts reshaping pharma today, with three critical shifts to watch.
Pharma shift #1: US Supreme Court change of stance in deference to agencies
The US Supreme Court has changed its stance on deferring to federal agencies like the FDA. In a significant ruling on June 28, 2024, the Supreme Court overturned the Chevron deference doctrine. This doctrine, established in 1984, required courts to defer to federal agencies' interpretations of ambiguous laws if those interpretations were reasonable.
With the Chevron deference no longer in place, courts may now rely on their own interpretations of ambiguous laws rather than deferring to agencies like the FDA. This shift is expected to have wide-ranging impacts on how federal regulations are interpreted with potential implications for pharmaceuticals pertaining to off-label marketing amongst others. With the Supreme Court’s decision, varying levels of enforcement and interpretation of regulations are expected to take place across different states depending on respective political party control.
Market-Leading Moves
Pharmaceutical companies can adopt several strategies to navigate the new regulatory landscape following the Supreme Court's decision to overturn Chevron deference:
- Robust Risk Management: Develop comprehensive risk management strategies to prepare for regulatory uncertainties. This could involve scenario planning and creating contingency plans for different regulatory outcomes. Pharma leaders who implement these practices will gain critical decision-making agility. Meaning they will be able to flex more effectively to state-by-state regulatory variations and minimize compliance risks.
- Innovation and Adaptation: Investing in innovation to stay ahead of regulatory changes. This includes exploring new technologies and approaches that comply with evolving regulations. Embracing innovation as a compliance strategy can take potential regulatory barriers and turn them into opportunities for differentiation, securing first-mover advantages in rapidly evolving market segments.
The Pharma Opportunity
This new regulatory landscape allows companies to take a more aggressive approach to developing new therapies. It will also make it possible for pharma companies to work with the FDA on equal footing to support the development of new therapies. This has already opened new opportunities in the 340B space which can affect reimbursement and the Laboratory Developed Test space. Capitalizing on these opportunities requires substantial organizational change management to realign regulatory affairs teams with a more proactive stance. Companies that successfully navigate this cultural and operational transformation will position themselves to extract maximum value from the new regulatory environment while competitors struggle with implementation.
Pharma shift #2: Focus on rare diseases and advanced therapies
The administration's emphasis on rare diseases and advanced therapies, such as gene and cell treatments, is likely to persist. During Trump's first term, there was a record number of drug approvals for rare diseases, thanks to incentives like the Orphan Drug Act.
Resulting appointments within the administration has additionally led to some pharma organizations reshuffling their portfolio effort in response. This is likely to result in the challenge of increased scrutiny on the misuse of orphan drug incentives, as well as ensuring these benefits primarily support smaller biotech firms.
Market-Leading Moves
With orphan drug approvals expected to accelerate and scrutiny intensifying simultaneously, pharmaceutical companies must recalibrate their rare disease approach. The most successful organizations will implement these targeted strategies:
- Collaborative Partnerships: Form partnerships with patient advocacy groups and smaller biotech firms to leverage shared resources and expertise. Benefits from collaborative partnerships include access to complementary expertise, shared resources and risks, accelerated innovation, and expanded market reach. These collaborations, whether with other pharma companies, academic institutions, or biotech firms, allow leaders to enhance their drug development capabilities, diversify their pipelines, and ultimately deliver better outcomes for patients while potentially improving their competitive position in the market.
- Innovative Clinical Trial Designs: Implement adaptive trial designs to maximize efficiency in small patient populations and consider basket trials or platform trial to study multiple rare diseases or treatment options simultaneously.
The Pharma Opportunity
Renewed focus on rare diseases presents strategic inflection points. Organizations who are leaders in specific rare disease areas have a unique opportunity to attract investment through acquisition or further partnership opportunities.
Meanwhile, the reshuffling of portfolios in response to administrative changes presents an opportunity for companies to reassess and optimize their research focus, potentially leading to more efficient resource allocation and improved long-term strategy. These shifts make it critical to realign—if not reimagine—their operating model so that it is built to support faster decision-making. Companies that are able to manage this transition effectively will capture market share while also creating meaningful patient impact.
Pharma shift #3: Pausing the enforcement of the FCPA
On February 10th 2025, an executive order was issued pausing the enforcement of the Foreign Corrupt Practices Act (FCPA) for 180 days. This decision aims to address concerns that the FCPA's enforcement has become overly expansive and unpredictable, creating an uneven playing field for U.S. companies competing internationally
The pause is intended to promote American economic competitiveness and prioritize national security interests. However, it has sparked debate about the potential risks of reduced anti-corruption enforcement and its impact on global business ethics.
Market-Leading Moves
This 180-day enforcement pause creates a deceptive compliance trap for pharmaceutical companies operating globally. Smart leaders will reject short-term compliance shortcuts in favor of these strategic approaches:
- Maintain Robust Compliance Programs: Even with the pause, it's crucial to continue adhering to high ethical standards. Strengthening internal compliance programs can help mitigate risks and ensure ongoing adherence to anti-corruption laws in other jurisdictions.
- Prepare for Resumption: Develop contingency plans for the resumption of FCPA enforcement. This includes being ready to address any retroactive investigations or enforcement actions that may arise once the pause is lifted.
The Pharma Opportunity
Pausing enforcement of the FCPA has provided pharmaceuticals with reduced immediate legal pressure and operational flexibility when operating in the US. But with the pause only for 180 days, there is a challenge to anticipate what will happen in the second half of 2025 and beyond especially in the context of the OECD Anti-Bribery Convention that establishes legally binding standards.
Furthermore, the rapid elimination of DOJ attorneys and a reshuffle of priorities may mean that the impact may last past the first 180 days.
This temporary enforcement pause creates a strategic window for pharmaceutical companies to reassess and strengthen their global compliance frameworks. Effectively capitalizing on this opportunity requires coordinated change management across multiple business functions, from legal and compliance to sales and market access. Companies that use this period to implement more efficient compliance processes—rather than simply relaxing standards—will be able to sustain competitive advantage when enforcement inevitably resumes.
What’s next?
Regulatory upheaval creates both challenges and opportunities for pharmaceutical companies. The Supreme Court's reversal of Chevron deference introduces regulatory uncertainty but also opens doors for more direct engagement with the FDA. Meanwhile, the Trump administration's focus on rare diseases demands strategic portfolio adjustments. Forward-thinking companies will embrace collaborative partnerships and innovative approaches to navigate this changing landscape. In our next installment, we'll explore operational implications and strategic responses to complete the picture of pharmaceutical industry adaptation under the new administration.
