Life sciences companies have spent the past year adapting to a business environment defined by rapidly emerging risks balanced with encouraging trends.
On one hand, firms contended with inflationary pressures that raised manufacturing and operational costs, the introduction of new federal policies around international reference pricing, ongoing supply chain disruptions, and increasing regulatory scrutiny, particularly around drug pricing. The evolving policy landscape and global geopolitical tensions further complicated market access and strategic planning.
On the other hand, the accelerated adoption of digital health technologies, robust investment in innovation, and expanded collaboration opportunities with payers and providers have presented new opportunities for success. Favorable regulatory initiatives supporting expedited approvals and real-world evidence utilization have also improved life sciences companies’ abilities to bring new therapies to market more efficiently.1,2
Together, these factors required life sciences companies to remain agile, invest in compliance and innovation, and build resilient strategies to capitalize on growth opportunities while mitigating risks.
As life sciences companies reflect on 2025, Milliman’s experts are focusing on five key issues that we believe will influence strategy, operations, and success in 2026.
Emerging regulatory and economic issues for life sciences companies to watch in 2026
1. Public health leadership changes: Disruption and opportunity at key agencies
In 2025, major shifts in leadership at the U.S. Food and Drug Administration (FDA), Advisory Committee on Immunization Practices (ACIP), and the Center for Disease Control (CDC) drove uncertainty. However, these agencies have clearly signaled they want to incentivize innovation via new priorities and programs. These include increased use of AI in regulatory review3 and the launch of the new Commissioner’s National Priority Voucher Program,4 which could both enable faster drug and device approvals. However, reductions in labor force and staffing changes at these agencies may also cause delays,5 requiring companies to remain agile and closely monitor regulatory timelines. Proactive engagement with regulators and readiness to adapt to evolving approval pathways will be essential.
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2. Medicaid eligibility and ACA subsidies: Market economics in flux
Ongoing changes in Medicaid eligibility due to the passage of Public Law 119-216 and uncertain ACA subsidy structures due to continuing negotiation around subsidy extension deals are affecting patient coverage and continuity, with direct implications for patient access and product economics. Life sciences companies must track how these policy shifts will impact patients, especially for therapies targeting vulnerable or high-risk groups. Market forecasting and payer engagement strategies should be updated to reflect the evolving coverage landscape and its influence on demand.
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3. Drug pricing shakeups: IRA, MFP drugs, and TrumpRx
The continued implementation of the Inflation Reduction Act of 2022 (IRA), selection and negotiation of Maximum Fair Prices (MFP) for 10 drugs in 2026 and 15 more in 2027,7,8 and direct-to-consumer options such as TrumpRx are reshaping the drug pricing environment in the US, especially in Medicare Part D. These developments affect coverage negotiations, formulary placement, and patient out-of-pocket costs. Life sciences firms need to anticipate new compliance requirements, adapt pricing strategies, and support patient access programs to remain competitive in this changing space.
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4. Tariffs, domestic manufacturing, and international reference pricing: Strategic pressures and opportunities
Global tariffs and trade tensions are exerting pressure on pharmaceutical manufacturers, influencing supply chain decisions and the economics of domestic production. Companies may face increased costs or be incentivized to shift manufacturing closer to home.9 Strategic assessment of sourcing, production, and distribution models will be critical to maintaining resilience and profitability amid fluctuating global market conditions.
At the same time, renewed attention stemming from the May Most-Favored Nations (MFN) executive order on domestic prices compared with those available abroad is placing market access pressure on life sciences companies.10 It is likely that there will be additional developments through models and regulations that will challenge traditional market access logic, domestically and globally. Opportunities may be found by strategically aligning pricing expectations to generate new or guaranteed patient access pathways.
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5. The future of 340B rebates
In 2025, significant changes were announced for the 340B drug pricing program, most notably the launch of the new 340B Rebate Model Pilot Program.11 This pilot, beginning in January 2026, shifts select drugs from the traditional upfront discount model to a post-purchase rebate approach. Under this alternative model, covered entities will pay the typical wholesale acquisition cost initially and then submit claims to receive rebates reflecting the statutory 340B ceiling price, instead of acquiring products at the 340B acquisition cost initially. The pilot applies to a limited number of drugs, specifically those subject to an MFP in 2026, and aims to address issues like Medicaid duplicate discounts and compliance with the Medicare Drug Price Negotiation Program (MDPNP). Manufacturers and Covered Entities (CE) will need to adapt to new workflows, reporting requirements, and timelines, with the Health Resources and Services Administration (HRSA) continuing oversight and audits. Additionally, changes to CE status are anticipated, with HRSA soliciting public comments to help shape the operational safeguards and administrative requirements for manufacturers and CEs under the new model.12 Adjustments in the 340B program could alter market dynamics,13 potentially impacting access for safety-net providers and patient populations. Life sciences companies will need to carefully assess the potential impacts of 340B program changes on their pricing and contracting strategies, particularly for drugs in the pilot.
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In summary
The life sciences sector experienced notable changes in 2025, shaped by updates in regulations, adjustments in coverage policies, new approaches to drug pricing, and mounting economic pressures. By staying informed, collaborating actively with regulatory bodies and payers, and refining their business strategies, life sciences companies can better prepare for opportunities and challenges in 2026.
1 Food and Drug Administration. (2025, October 29). FDA moves to accelerate biosimilar development and lower drug costs [News release]. https://www.fda.gov/news-events/press-announcements/fda-moves-accelerate-biosimilar-development-and-lower-drug-costs.
2 Food and Drug Administration. (2025, September 23). Expedited programs for regenerative medicine therapies for serious conditions: Draft guidance for industry. https://www.fda.gov/media/188874/download.
3 Food and Drug Administration. (2025, June 2). FDA launches agency-wide AI tool to optimize performance for the American people [News release]. https://www.fda.gov/news-events/press-announcements/fda-launches-agency-wide-ai-tool-optimize-performance-american-people.
4 Food and Drug Administration. (2025, December 18). Commissioner's National Priority Voucher (CNPV) pilot program. Retrieved December 23, 2025, from https://www.fda.gov/industry/commissioners-national-priority-voucher-cnpv-pilot-program.
5 Tin, A. (2025, April 28). FDA to undo some layoffs, after cuts to inspections and drug safety. CBS News. https://www.cbsnews.com/news/fda-to-reverse-some-layoffs-food-drug-safety/.
6 See Public Law 119-21 at https://www.congress.gov/119/plaws/publ21/PLAW-119publ21.pdf.
7 Centers for Medicare and Medicaid Services. (2024, August). Medicare Drug Price Negotiation Program: Negotiated prices for initial price applicability year 2026. https://www.cms.gov/files/document/fact-sheet-negotiated-prices-initial-price-applicability-year-2026.pdf.
8 Centers for Medicare and Medicaid Services. (2025, January). Medicare Drug Price Negotiation Program: Selected drugs for initial price applicability year 2027. https://www.cms.gov/files/document/factsheet-medicare-negotiation-selected-drug-list-ipay-2027.pdf.
9 Steinzor, P. (2025, November 14). How Trump’s trade policy could raise costs, deepen drug shortages. AJMC. https://www.ajmc.com/view/how-trump-s-trade-policy-could-raise-costs-deepen-drug-shortages.
10 Exec. Order No. 14297. Delivering most-favored-nation prescription drug pricing to American patients. (2025). Federal Register, 90(93), 20749-20751. https://www.whitehouse.gov/presidential-actions/2025/05/delivering-most-favored-nation-prescription-drug-pricing-to-american-patients/.
11 Health Resources and Services Administration. (2025, December). 340B Rebate Model Pilot Program. Retrieved December 23, 2025, from https://www.hrsa.gov/opa/340b-model-pilot-program.
12 Health Resources and Services Administration. (2025, August 1). 340B program notice: Application process for the 340B Rebate Model Pilot Program. Federal Register. https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b-rebate-model-pilot-program.
13 340B Editor. (2025, November 21). Walgreens to temporarily stop 340B discounts at contract pharmacies for certain expensive drugs. 340B Price Guide. https://www.340bpriceguide.net/articles-news/147-walgreens-to-temporarily-stop-340b-discounts-at-contract-pharmacies-for-certain-expensive-drugs.