Medicaid cuts in Trump's Megabill will meet some drug makers

US President Donald Trump presents a comprehensive expenditure and tax legislation, which is known as “a great beautiful act of law” after signing it in the White House in Washington, DC, USA on July 4, 2025.

Leah Millis | Reuters

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We are back with President Donald from the holiday weekend Trump's “big beautiful” bill officially signed into the law.

His pioneering tax cuts and its spending package include more than 1 trillion dollar cuts in Medicaid, which endangers millions of Americans in need of protection without health insurance and hospitals and centers that are provided to them. While reducing health expenditure has massive human costs, you will also influence the pharmaceutical industry.

Medicaid only makes up part of the income of many drug manufacturers in the USA – and an even lower proportion of their overall revenue worldwide. Medicaid also refunds companies for drugs at lower prices than in other programs such as Medicare or Commercial Insurance, as can be seen from a Monday notice of the Leer Link Partner David Risinger's analyz.

This is mainly due to a program in which medication manufacturers provide discounts in Medicaid for the insurance of their medicinal products, which leads to lower net drug prices.

Nevertheless, Risinger said that “future loss of income was a marginal negative” for drug manufacturers.

He also said that some corporate sales are exposed to the Medicaid market more than others, based on earlier corporate comments and the internal estimates of his company.

Spot point pharmaceuticals And Gilead You rely more on Medicaid than on other companies with a large cap, said Risinger. According to the note, Medicaid makes 25% of the US turnover of Vertex and 22% of the domestic sales of Gilead.

At a conference in June, Vertex announced that Medicaid is 23% of the turnover from his cystic fibrosis medication, which are the most important sales drivers of the company. The track: half of all children and a third of all adults with this genetic state rely on Medicaid to afford the treatments and the care they need to live a healthy life, according to the cystic fibrosis foundation.

The Gilead headquarters in Foster City, California, USA, on Monday, January 29, 2024.

David Paul Morris | Bloomberg | Getty pictures

Medicaid also plays a major role in the HIV prevention and treatment, especially in underserved populations, which is a central focus for Gilead. For example, the biktarvy of the company's HIV treatment pill in relation to the entire Medicaid drug expenditure in 2022 was equipped as the second highest drug medication and, according to a note of Jefferies analysts, was still one of the most frequently used drugs in the program in March.

Nevertheless, the analysts said that Hit Gilead's business would probably be “manageable” by Medicaid. The note was based on estimates from an earlier version of the invoice.

Trade insurers also offer most of the cover for HIV prevention and ongoing treatment, while Medicaid plays a smaller one Important, role.

Medicaid represents 12% of Johnson & JohnsonDomestic sales (without the business with a medical device) and 12% of 12% Novo NordiskThe US income. Under large pharmaceutical companies, Bristol Myers Squibb And Pfizer Had the lowest exposure, with only 4% of their US revenue comes from Medicaid.

Risinger said Medicaid makes 15% of RocheThe US income. In a statement on Tuesday, however, Roche said that the market is only less than 10% of the sales in the country.

Risinger found that significant Medicaid cuts will only occur after the intermediate elections in November 2026, so that the financial effects on drug manufacturers will start essentially in 2027.

There is also another important victory for drug makers in Trump's legislative template: a provision that is freed more medicines from the Medicare drug price negotiations of inflation reduction act.

We will continue to monitor the effects of legislation on the industry, so stay tuned.

Feel free to send Annikakim.constantino@nbcuni.com tips, suggestions, ideas and data to Annika.

Latest in the healthcare system Tech: AI startups have drawn most of the digital health financing this year this year

We are halfway by 2025, which means that we have some checking financing data for digital health. Even in a volatile macroeconomic and political environment, the sector saw “strong dynamics” according to a new report by Rock Health.

Digital Health companies in the United States received $ 6.4 billion in funds in the first half of the year, compared to $ 6 billion in the previous year and 6.2 billion US dollars in the first half of 2023, according to the report. The sector increased 3.4 billion US dollars in venture in the second quarter alone, which has increased an average of $ 2.6 billion per quarter since 2023.

Start-ups that use artificial intelligence as the core component of their product increased 62% of all digital health regulations in the first half of the year when AI-capable companies have recorded a large part of the new capital. These companies pulled an average of 34.4 million US dollars per round.

“Digital health proves that it is more than just steady and resistant. The sector enters into a new phase of traction and effect, with AI playing a linchpin,” said Rock Health.

But while the financing has expired, the deal Count has dropped slightly. Digital Health Companies completed 245 deals in the first year of the year, while in the same period of the previous year 273, the report says. Nevertheless, megadeals or increases over 100 million US dollars increase. In the first half of the year there were 11 megadeable, which fits the 17 megadedale at speed, which took place in all entire 2024.

This year there was also a flood of M&A activities within digital health. The sector closed in the first half of 2025 107 M&A agreements, which could quickly exceed the 121 M&A offers that were closed in 2024.

And much to facilitate many digital health investors, Hingse Health and Omada Health won the jump and debuted in public markets. Rock Health said these outputs are undeniable “the previous moments of outbreak from 2025”.

“These debuts for public market gave investors to the urgently needed redemption after a drought, hard public market services and a number of youngest take-off private individuals,” said Rock Health.

Read the full report here.

Feel free to send tips, suggestions, story ideas and data to Ashley at Ashley.capoot@nbcuni.com.