Healthcare’s Premier Industry Advisor

While the 2024 Presidential and Congressional election cycle featured limited discussion of health care, 2025 has featured intense focus on the industry as President Trump staffs his administration and a full Republican lineup looks to pay for extending Tax Cuts and Jobs Act policies. Robert F. Kennedy, Jr. and Dr. Mehmet Oz represent a new type of political appointee for HHS and CMS, respectively. RFK, Jr. takes the helm at HHS as the Trump administration looks to reduce staff across HHS and reduce funding, including for NIH grants. For Dr. Oz, there are questions about how he will handle Inflation Reduction Act (IRA) drug pricing negotiations as well as Medicare Advantage policy. In Congress, Republicans look to extend tax cuts, Medicaid has been at the top of the list of potential cuts. The list of potential policies range from repealing Biden Medicaid rules, to imposing work requirements, to major changes to the program including limiting annual Medicaid growth and reducing the Medicaid expansion federal matching rate to the traditional Medicaid rate, which would eliminate expansion in many states. The search for Medicaid cuts has created tension among House and Senate Republicans, with fiscal hawks arguing for larger cuts while more moderate members and those from battleground states and districts uncomfortable with even more modest cuts. Congressional Republicans are intent on passing an extension of the tax cuts, so this will continue to be an issue until that goal is satisfied. Another key issue is the fate of the enhanced Affordable Care Act (ACA) exchange subsidies, initially passed as part of the American Rescue Plan in 2021 and extended in the IRA in 2022. Since 2021, over 12 million new enrollees have joined the exchanges, but the subsidies are set to expire at the end of 2025. It is not clear how Congressional Republicans could get on board with an extension, but there will be intense lobbying from providers, payors, and patients throughout 2025. Beyond these 2 major issues, there are a host of other issues, including physician fee schedule reform, the impact of the Department of Governmental Efficiency on Medicare and other government systems, and any read through from the IRA on pharma, Part D sponsors, and related entities, such as CROs. We hope you enjoy our latest Washington Health Care Policy Report.

The NHS priorities and operational planning guidance for 2025/26 presents an evolving landscape for investors and service providers, characterised by greater flexibility in funding, digital enhancements, and workforce optimisation. With increased financial flexibility granted to local systems, streamlined procurement processes, and an emphasis on best-value frameworks, this changing landscape presents investors with new opportunities. Investors and operators who are able to strategically align with these priorities may stand to capitalise on the UK healthcare sector’s shift towards sustainability, efficiency and modernisation.

NHS dentistry has been significantly impacted in recent years, with the COVID-19 pandemic exacerbating systemic weaknesses. Pre-existing issues including chronic underfunding, workforce issues, and unattractive NHS contracts have collided with pandemic-related disruptions to leave millions of patients waiting for care. With the recent uplift in NHS dental contract falling short of the recommendations from the Review Body on Doctors’ and Dentists’ Remuneration (DDRB), the Labour government has failed to alleviate the funding challenges associated with NHS dentistry, and intensified financial pressures on NHS dental providers. As investors look towards the rest of 2025 and beyond, one key question is this: how are these challenges accelerating uptake of private dentistry within the UK dental landscape, and what new investment opportunities may they present in the future? In this paper, Marwood examines the implications of the NHS contract uplift and broader funding constraints, assessing their impact on the competitive landscape of UK dentistry. We explore key market trends, identify potential areas of growth for private providers, and outline strategic considerations for investors seeking to capitalise on emerging trends in dental care.

Penetration of VBC initiatives in Medicaid, particularly those that are risk-based, has historically lagged the more significant growth in VBC within the Medicare Advantage population. However, as Medicaid Managed Care plans and states face cost pressures while aiming to improve outcomes and increase access, there has been an increasing shift away from fee-for-service reimbursement models tied to volume and towards alternative payment models (APMs) that more closely tie reimbursement to outcomes and align incentives by gradually encouraging providers to take on more risk. As a result, there is growing interest among a diverse group of stakeholders including investors, providers, MCOs, and healthcare technology companies in pursuing new revenue opportunities within Medicaid VBC. Programs that effectively realign incentives to prioritize outcomes and value can generate savings for states and MCOs and lead to improvement in the overall quality of care for patients. Herein we address opportunities for VBC for the Medicaid population, identify major challenges facing stakeholders, and examine differences between states that may facilitate greater adoption and success.

Italy is expanding the scope of its Innovative Medicines Fund which will undergo a restructure to now include specific spending ceilings for conditionally innovative medicines and specific antibiotic drugs in 2025, as indicated by the 2025 Budget Law. Alongside this, the Italian Medicines Agency (AIFA) is expected to review the current evaluation criteria for the attribution of innovative status by 31 March 2025, and is likely to include new criteria which are expected to focus on a wider combination of technological and clinical factors that spans the entire pharmaceutical life cycle such as production technology and impact on patients’ lives. This reform presents an important shift for the innovative medicine landscape in Italy by offering ring-fenced funding for specific drug categories and allowing more drugs to be eligible for funding. In this piece, Marwood analyses the changing landscape for innovative pharmaceuticals in Italy and how this may impact investors as well as manufacturers.