Healthcare in Focus: From Drug Prices to Corporate Power

Debate around U.S. drug pricing intensified this week, as the Medicare Drug Price Negotiation Program ramped up negotiations on a new slate of high-cost medicines—an historic lever in America’s long-contentious battle over prescription costs. In mid-September, the Centers for Medicare & Medicaid Services (CMS) were deep into talks with manufacturers of 15 additional drugs, building off the Inflation Reduction Act’s landmark cost reforms. Among the drugs in the spotlight: blockbuster diabetes and weight-loss products such as Ozempic (by Novo Nordisk), which recently saw its list price jump 3%—now reaching $935.77 per month, according to the latest market data.

The CMS’s process, still slow by the standards of retail markets, aims to have finalized prices for the latest cohort of drugs by November 2025; these would take effect in 2026. Policy analysts expect steep cuts for several products that drive Medicare’s annual $200 billion prescription budget. For example, apixaban and empagliflozin—both appearing on the negotiated list—are forecasted to see their Medicare prices reduced by 56% and 66% respectively starting next year, potentially saving billions for seniors. Despite that, list prices for these very drugs increased this January in anticipation, revealing drugmakers’ resistance to pricing pressure and the sector’s adeptness at defending revenue.

On the corporate side, Big Pharma remained both resilient and aggressive in navigating these policy headwinds. Eli Lilly, for instance, raised its fiscal 2025 revenue outlook after beating second-quarter estimates, buoyed by strong sales of its diabetes and GLP-1 franchise (Zepbound and Mounjaro collectively brought in over $8.5 billion this year). Novo Nordisk also saw mid-teens revenue growth, powered by GLP-1 demand across the globe. Meanwhile, companies like Pfizer and Johnson & Johnson wrestled with slower growth in legacy products but continued pouring investment into pipeline expansion and strategic M&A.

Across the sector, over $13 billion in deal value was inked in 2025’s first three quarters, with Eli Lilly, Regeneron, and Biogen targeting late-stage assets in obesity, pain, and neuroscience. The patent cliff remains a looming specter—analysts expect top producers to lose a combined $400 billion in revenue through 2030 as exclusivities expire, fueling more consolidation and a scramble for breakthrough assets.

Health insurers and pharmacy giants occupied their own battleground. CVS Health and UnitedHealth both reported rebounding results after a tough 2024. CVS outperformed market expectations with $95 billion in quarterly revenue, boosted by Medicare Advantage, while simultaneously announcing plans to exit individual ACA exchanges in 2026 amid persistent cost pressures. Amazon Health, still in its expansion phase, continued piloting new care delivery models and digital pharmacy offerings, but without yet matching the scale of entrenched players.

The policy environment in Washington and several state capitals was especially turbulent. In D.C., healthcare sector groups intensified lobbying efforts for an extension of ACA premium subsidies set to expire at year-end, with insurers, hospital systems, and advocacy coalitions calling on Congress to preserve these financial supports in the looming budget negotiations. The outcome could shape individual coverage markets heading into 2026.

Meanwhile, states like Massachusetts and New Mexico moved forward with new laws aimed at expanding scrutiny of healthcare transactions, particularly in response to a growing wave of private equity and REIT investment in clinics and outpatient networks. The momentum toward greater transparency and gatekeeping reflects growing public skepticism toward the influence of non-medical investors over clinical decisions—adding new challenges for dealmakers and strategists in the sector.

Federal agencies, not to be outdone, continued their clampdown on pharmaceutical advertising. The FDA rolled out a new wave of warning letters targeting “misleading” drug ads and signaled forthcoming rulemaking to close regulatory gaps—moves hailed by some policy experts as a much-needed step toward “radical transparency” in healthcare promotion.

On Wall Street, the healthcare sector remained a laggard amid 2025’s broad S&P 500 gains. The MSCI World Healthcare Index was down nearly 10% year-over-year in August, a stark contrast to the fireworks in GLP-1 stocks and specialty pharma, where select names soared on earnings momentum. In the ETF landscape, new launches like the Bellevue Healthcare UCITS ETF targeted active, conviction-driven exposure to outperform legacy cap-weighted indices—an experiment in navigating the sector’s growing dispersion.

The months ahead promise more volatility and pivotal developments. As negotiated drug prices begin to take hold, expect continued push-pull between public demands for affordability and the industry’s quest to maintain innovation—and, ultimately, margins. The next phase of Medicare price setting, especially for cancer and chronic disease drugs, will test just how much leverage the government wields versus corporate lobbying muscle.

Independent Thinking. Steady direction.