S2E8: Pharma in Flux: Navigating Regulatory Uncertainty and Manufacturing Momentum in 2025

In this mid-2025 update, The Life Science Effect explores the latest trends in pharma and medical devices—from regulatory upheaval under RFK Jr. and Dr. Makary to continued momentum in U.S. drug manufacturing. Learn how industry leaders are navigating clinical trial delays, FDA uncertainty, and global GLP-1 market expansion.

Full transcript:

Hey, everybody. Steve again, welcome back to the Life Science effect. If you're listening in the future, which most of you probably are, this may once again sound prophetic or maybe like a time capsule from a moment of flux. Today's updates a follow up to our episode. Earlier this year. Back then, we talked about a lot of uncertainty. A new administration in the United States. And possibly a dramatic shift in the regulatory landscape. And questions about the future. Of pharma and medical device in the United States. Well, we've got some answers now. And a few more questions. So let's get into it. First of all, Robert F Kennedy junior has been confirmed as the head of HHS. Which we were expecting last time, but we didn't have final confirmation of and we talked about some of. What we might see. With him being the head of HHS. And that by itself would have raised a lot of eyebrows in the industry, but his subsequent decisions have done more than that. What we're seeing is some reductions in basic research funding, which began with the president's executive orders and RFK Junior. Seems to be in alignment with that. He continues to do what he's done in the past, which is make false statements. About autism vaccine safety and other theories that have been. Long debunked and are just not science based. And these things are shaping public policy discourse, and some of the policy priorities. Over at the FDA, which is part of HHS, Mark doctor Martin Mccary is now at the helm. He's a surgeon from Johns Hopkins and is also a vocal critic of government health agencies. His record includes some misleading statements about COVID-19 and abortion, and. And so concerned and the food pyramid, all all sorts of. Depending on your opinion, either flat out false statements or at at least misleading. Certainly not in alignment with. Settled science. So it raises concerns that we have a science based agency being led by someone who may not follow the mainstream science. And the science based governance could take a back seat to political alignment, whether it be with RFK, junior or or President Trump, or both. So I'm just saying it plainly, this could be a volatile time for evidence based regulation. And the industry needs to be aware of that. Why does it matter? Well, like we've said before, we've got a well over a trillion dollar industry in the Pharmaceutical industry and they rely on a functional science based FDA. And when that credibility is threatened, global regulators, many of whom depend on FDA data, are also impacted. So we're already seeing ripple effects, some clinical trial timelines are slipping. Sponsors are delaying filings. Uncertainty is turning into sort of an operational pause. Yet there's reason for hope. There's momentum in the industry despite turbulence. Pharma medical device companies are continuing to invest in large scale US manufacturing projects. They're not short term bets. They're five to seven-year initiatives. 10s of billions of dollars have already been committed. A lot of these projects have already broken ground. Many announcements have been made. Canceling now would draw investor backlash and potentially delay. These drug supply expansions that are needed to meet the demand. These projects, as we said last time, are things like active pharmaceutical ingredient facilities, drug product facilities. Producing these drug substances once the API and drug substance facilities. That used to be offshore to Puerto Rico, Ireland, China, India are making their way back to the US. Full finished facilities. For those drug products complete completing the formulation and packaging sites are popping up in the US. And expansions across biologics and small molecule manufacturing. So the current administration might be, say, skeptical, skeptical of regulatory institutions, but they're eager to champion made in the USA manufacturing. And a trillion dollar industry has a lot of influence over. The politicians and government, which means the political calculus works in the favor of these projects staying funded and moving forward. I would also expect the FDA, the the FDA to be influenced by these multi billion dollar corporations. Going to them and saying if you want us to actually need these multibillion dollar. Manufacturing sites. We need a market and have a market. We need a functioning FDA that follows the science. You have to follow the science because that's what makes it predictable. We can't be subject to the whims of whatever political expediency there might be when we're making billion dollar bets. Over the course of three to five years. We can't invest that money and then three to five years from now find out. That we're not getting approval not because of the science, but because of some political alignment. I expect that industry to exert some influence, let's say, over the agency and over the politicians that oversee the agency. Another update I had the opportunity to. See a presentation by Graham Lewis, who some of you may know as the Vice president at IQ via. He's a thought. Leader he gives presentation multiple presentations every year to update industry trends and update what's going on in pharmaceuticals, medical devices, mainly pharma. And it was a fascinating presentation and I just wanted to give a few highlights from it. So shifting gears to that global picture. Here. He shared insights that other pharma leaders are watching pretty closely. One of them is there's a growing dependency on the US market with some of the large companies such as Eli Lilly. And lilies, he said, lilies. Domestic launches are really outperforming global counterparts. China, Brazil and the EU and UK remain important, but cost pressures and regulatory complexity are making them a bit tougher. The Chinese market is especially strategic because. China, as as we all know, has has more people than any other country and they their population is aging. And so those chronic disease rates are going up in China. And so they're going to need the kinds of products that are. That are making a lot of headlines these days, let's say. Specifically, obesity and other cardiometabolic issues like type 2 diabetes. Is really a global driver right now and will be for the next at least five to seven years. With GLP one medications like lagoni, Manjaro, Ozempic, Zepp bound. They're becoming available in over half the world's high population, high GDP countries. And the one exciting thing about that cardio metabolic space. Is. There are some solid dose forms of those medications that are expected to be approved later this year. Possibly early next year. Which opens up even more of a market. Especially in countries that don't have the refrigeration that's needed for the liquid form to get the shot, the the the vial. Whether you're getting a vial or a pre filled syringe, those have to be refrigerated. To be able to be kept long term. I think you can only they can only be at room temperature for like less than a few weeks before they start to go bad. And so if you think about. Countries or areas of the world that may not have that infrastructure to be able to have the refrigeration. There's an unmet need there. For people living with diabetes or obesity, and so if there's a solid dose form, those are stable at room temperature. In most cases, they will be these will be. And stable for a much longer time, which means now you can get into those markets and help those patients that need that medication or there are cultures that don't like the shot. Japan is an example. Pharma companies have found. Over the years that it's difficult to get into the Japanese market with. A drug that needs to be injected so if they can have the solid dose form that opens up the Japanese market as well. As well as persistence, that's another issue that has been found with. These. Obesity medications. Factors like you know price sensitivity, supply issues and sort of fractured care models makes it hard to keep patients on the long term treatment, which in turn. Causes the payers like Medicare, Medicaid, insurance companies. National Health Service in UK or in the EU? It makes them reluctant to pay for these medications. At first, you might think. Why wouldn't they want to pay for them? If you can get somebody to lose 15 to 25% of their body weight, a lot of other issues get taken care of. That might be costing the insurance company a lot of money. You know, we know the issues that come. Along with people living with obesity, you know, joint failure, back problems, heart problems, blood pressure, sleep apnea. The list goes on. So you would say, well, why not spend 1000 bucks a month to get the weight off and then you'll save money in the long run? Well, the issue is patients aren't staying on it long enough to get the weight loss to help realize the gains. Again with the solid dose form, it's easier to maybe I haven't heard anything about what the pricing is going to be for those pills capsules is, is how they're going to probably come out at first before they figure out a a pill, they'll have capsules. And I haven't heard what the price point is going to be, but if it could be much lower, let's say a couple 100 bucks a month. A lot more people may get on it and stay on it. I'm not an expert on 3rd party payment Medicare, Medicaid insurance. But. Graham Lewis did have some things to say about that, and he said, is it? It is interesting when a new medication comes out that may provide long term cost savings, it's interesting to see how long it takes for these third party payers to actually start covering it. He said one, you know, statins are an example. Blood pressure medication is another example. In some cases it took until there were generics available for those third party payers. Start. Somebody asked me recently when are these GLP one medications coming off patent and I still haven't looked it up, but before the next episode I'll look it up, or maybe one of you knows and you can comment down below. Or shoot me an e-mail. At [email protected]. OK, moving on. So we're also seeing another thing from Graham Lewis. We're also seeing pressure to innovate in immunology, cardiometabolic, neurology, oncology. Because we could see double digit growth in those segments, but only through innovation. Of course the challenge is with the regulatory landscape being a little bit uncertain right now. How are we going to get to that innovation? So that's the challenge. This is the prognostication part. How is the industry going to address this? My prediction is. Some of the headlines we're seeing aren't going to come to pass like. People saying that the head of the FDA, you know, doesn't believe in science. Well, he does believe in science. Maybe there's just going to be more scrutiny. Maybe there's going to need to be more clinical data. Maybe it'll take longer and they'll need to run more trials, so maybe innovation will be delayed, but it doesn't mean it's going to come to a screeching halt. Maybe. That's my prediction that this will shake out in the next few months because one of the tried and true things you can rely on is regardless of the way the political winds are blowing, when you start messing with rich people's money, they start to get upset and they start to do something about it. And one things for sure, these pharmaceutical companies are making people a lot of money and they're not going to sit back and watch their industry get slowed down or have their stock returns. Suffering. Because of some political points that somebody wants to score. So that's my. It's strange to call it hope, but that's my hope is that that system, however unfair it might be, probably will exert the kind of pressure we're going to need to make sure the FDA continues to be science based and predictable. OK, what does all this mean for BPM associates? Our presenting sponsor? Well, we're already seeing the impacts a lot of what I predicted is is happening. We're seeing an uptick in work to support these domestic manufacturing projects. Clients are looking for clarity and calm in the midst of the regulatory chaos. And teams that stay productive and engaged. Will win out in the long run and our teams are staying productive. They're staying engaged because we continue to support our folks through the uncertainty. Because our values aren't just words on a slide, people first relationships matter service to a greater cause. DI Belonging those things keep us grounded and they keep our clients coming back. That's it for today. As always, thanks for listening to the life science effect. If you found this helpful, like subscribe, follow wherever you get your podcast. Share us out on LinkedIn. You can e-mail me at [email protected] or you can visit the life science. Electric.com. 321. As always, thanks for listening to the life science effect. If you found this helpful, like subscribe or follow wherever you get your podcasts. You can e-mail me at [email protected]. Or visit thelifescienceeffect.com. Stay safe out there and keep your heads up.