Biggest Topics in Healthcare for 2025

2024 Closeout and Look Ahead

As we close out 2024, I find it important to reflect on where we are today and begin to make predictions about healthcare in 2025 and 2026. I’ll explore the hottest topics to follow in 2025 and how they may begin to impact capital flows in the current healthcare ecosystem.

2024 was marked by considerable pressure on the large “Big Six Payors” that have dominated healthcare over the past five years, driven largely by their aggressive vertical integration strategies. This pressure has created ripple effects throughout the industry, from manufacturers to providers to patients. As we turn the corner into a new year, I want to highlight the top five topics that could significantly shape the healthcare landscape in 2025 and beyond—and how your medical device, pharma, or digital health company might prepare for what’s to come.

PBM Reform

PBM reform has been the hottest topic in healthcare throughout 2024, dominating headlines and policy discussions. While reform narrowly missed inclusion in the final budget bill, the release of the FTC report in June—led by Lina Khan—has catalyzed momentum for governmental action against the three largest U.S. PBMs: OptumRx/UNH, Express Scripts/Cigna, and Caremark/CVS.

These PBMs, which collectively control 81% of the market, have drawn criticism for their vertical integration with their parent health insurance companies, giving them immense leverage over drug pricing and reimbursements. This consolidation has squeezed retail pharmacies to the breaking point, evidenced by Rite Aid’s bankruptcy, Walgreens’ financial struggles, and the closure of many local pharmacies. The opacity of PBM pricing, particularly spread pricing, has drawn calls for transparency, with many advocating for a transition to fixed, transparent fee-based models.

2025 will be a pivotal year for PBM reform as legislative efforts take shape. The stakes are high, and the outcomes will create clear winners and losers. For stakeholders across the healthcare ecosystem, the ability to anticipate and respond to these changes could be the difference between thriving and struggling in the new environment.

Biosimilars

2024 was a breakout year for biosimilars, laying the groundwork for what many believe will be a transformative decade. The introduction of interchangeable biosimilar options for drugs like Humira—representing approximately $20 billion in annual spending—has been a game-changer. Employers, recognizing the opportunity to lower costs without compromising care, have begun offering zero out-of-pocket biosimilars to employees.

Looking ahead to 2025, the adoption of biosimilars is set to accelerate. Larger employers are expected to increase the percentage of employees using biosimilar versions of Humira, and Stelara’s entry into the market mid-year will add another high-impact drug to the mix. With the biosimilar market projected to surpass $100 billion by the end of the decade, stakeholders need to stay agile to capture the opportunities presented by this rapidly expanding sector.

IRA Impacts

The Inflation Reduction Act (IRA) has been a defining piece of legislation for healthcare over the past two years. Its effects began to materialize in 2024 with measures like the $35 insulin price cap, the elimination of cost-sharing beyond the $8,000 catastrophic threshold, and the expansion of the Low-Income Subsidy program. But the most transformative change—the $2,000 out-of-pocket cap—goes live in 2025.

This cap shifts reinsurance risk from the government to health insurers managing Part D plans, fundamentally altering the economics of Medicare. Big Six Payors will shoulder more financial risk, potentially reshaping margins and benefits for Medicare Advantage and Part D plans in 2026. The broader implications for premiums and federal subsidies in the coming years remain uncertain, but the IRA is set to drive significant changes in how Medicare operates. Stakeholders should keep a close eye on its ripple effects throughout 2025.

ACA Outlook

The Affordable Care Act (ACA), or Obamacare, has seen remarkable growth since its rocky launch in 2014. Over the past five years, enrollment has doubled to over 21 million people, driven in part by enhanced premium subsidies introduced during the COVID-19 Public Health Emergency and extended under President Biden.

However, 2025 is shaping up to be a critical year for the ACA. These subsidies are set to expire at the end of the year, raising questions about the program’s sustainability. If they are not extended, the ACA market could contract significantly—by as much as 35-40%, according to some estimates. Centene, the largest ACA provider in the U.S., will be a bellwether for the market as it navigates these challenges. Whether the incoming administration chooses to make the subsidies permanent or lets them lapse will be a key storyline to follow.

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