Insurers and pharmaceutical companies faced significant challenges this year as President Donald Trump and Republican lawmakers in Congress presented stark choices: stand firm or strike deals to protect their bottom lines.
While drug companies opted for the latter, negotiating agreements to alleviate potential damage, insurers fought hard to fend off the threats posed to them. Early results from these strategies offer key insights into the current state of the industry.
This month, Trump accused “money-sucking insurance companies” on Truth Social, vowing to redirect their funding from Obamacare to patients. In contrast, he praised drug companies that had agreed to lower prices, calling their CEOs “great talented people” and reaffirming his support for their profits.
For insurers, the outlook for securing an extension of the enhanced Obamacare subsidies, which were expanded during the pandemic, looks bleak. Meanwhile, the tariffs Trump had threatened to impose on pharmaceutical companies are still on hold, pending further agreements.
Trump’s contrasting treatment of these two powerful sectors offers a valuable lesson for lobbyists navigating his unpredictable presidency. The key takeaway? Favourable relationships with the administration are crucial, while confrontation carries significant risk.
Insurers Struggle, Pharma Finds an Ally
While health insurers have faced setbacks, the pharmaceutical industry has managed to avoid public confrontation with Trump. Instead, drugmakers have sought private agreements, particularly around tariffs. Five major companies, including Pfizer, AstraZeneca, and Eli Lilly, have negotiated deals with the White House in exchange for tariff relief—though analysts suggest the deals will have minimal impact on drug prices.
Insurers, by contrast, have struggled to sway lawmakers and the president, particularly regarding Medicaid cuts and the expiration of Obamacare subsidies. The American Health Insurance Plans (AHIP), the insurance industry’s trade body, has heavily lobbied for the extension of these subsidies, investing record amounts into Washington influence efforts.
However, Trump’s recent criticisms of the insurance sector, and his calls for funds to go directly to consumers rather than insurers, signal tough times ahead. “Take from the BIG, BAD Insurance Companies, give it to the people,” Trump declared, intensifying pressure on the sector.
Industry at a Crossroads
The diverging fates of insurers and pharmaceutical companies illustrate broader tensions in the healthcare system. Record amounts of money have been poured into lobbying efforts, with insurers spending more than $13 million this year, and drugmakers investing around $30 million.
Despite this spending, insurers face an uncertain future as the GOP’s tax cuts and Medicaid cuts loom large. The projected loss of health coverage for millions of Americans under these policies could increase premiums and worsen the financial pressure on insurers.
Looking ahead, Trump’s scrutiny of the insurance industry is expected to intensify. Lobbyists warn that the health insurers’ ability to manage this scrutiny will determine their prospects, particularly as public concern over healthcare affordability grows.
“If you’re not engaged, you’re really in trouble,” said Dean Rosen, a lobbyist representing insurers. But as the political landscape shifts, questions remain about the future power of Congress, and whether Trump’s direct influence will continue to reshape the industry.
As Trump’s influence over healthcare policy deepens, the entire sector—insurers and drug companies alike—will need to adapt to an increasingly unpredictable environment. The coming months are set to be a critical test for the health insurance industry, as it faces mounting pressure from both political forces and the broader economic landscape.