Trump's Regulatory Rollback Hailed As Big Pharma Plans Expansions

Big Pharma executives feel optimistic about their industry’s trajectory under a second Donald Trump presidency, with regulation rollbacks and other changes likely to boost bottom lines for drugmakers, offering more runway for real estate expansion.

“I truly believe the opportunities clearly outweigh the risks, because this is an administration, to start with, that they believe that strong business, strong private sector, strong entrepreneurship makes America great,” Pfizer CEO Albert Bourla told reporters during the January J.P. Morgan Healthcare Conference in San Francisco. 

The swift changes to economic and health policy, research funding and grantmaking that have taken place since Trump started his second term in late January have presented an inflection point for pharma.

“Public policy is the single most important factor to our future,” Pharmaceutical Research and Manufacturers of America President and CEO Stephen Ubl said in a keynote speech at a forum last month.

With expectations that Trump will make mergers easier, cut regulations and roll back Biden-era price negotiations for drugs, Ubl sees potential.

“From where I sit, the prospects for bold, meaningful change have never been greater,” he said. “We have a disruptor in chief in President Trump and a new [health and human services] secretary — both of which are committed to overturning the status quo. We embrace disruption because we are disruptors.”  

While there has been worry around the impacts of changes and cuts to research funding from the National Institutes of Health, including real estate impacts, there are also signs that Trump policy and goals may help bolster other parts of life sciences real estate, especially biomanufacturing. 

In an effort to reshore and protect supply chains in anticipation of tariffs, Big Pharma plans to invest billions to break ground on new manufacturing. It is the clearest and most immediate implication for real estate.

Eli Lilly announced plans Wednesday to spend $27B on four new U.S. plants, which came after a meeting in which Trump reportedly warned industry CEOs that tariffs are coming and reshoring was a good idea, according to Bloomberg.

“We’ve had a strong view on biomanufacturing for a while,” said Matt Gardner, CBRE advisory life sciences practice leader. “If anything, this would just accelerate the reshoring that’s already happened. It just might speed up.”

There are other Trump policy shifts the industry would be interested in that have yet to manifest. The administration might change its views on reshoring incentives due to national security implications or make regulatory shifts that would help lower interest rates or improve the M&A environment. 

There has also been talk of ending the Medicare drug price negotiation contained in the Inflation Reduction Act. These changes haven’t been part of the initial policy rollout but would be welcomed by Big Pharma. The year is already off to a good start in M&A, with $28B in mergers so far, according to Stifel data.

“Some of the pricing mechanisms that were in the Inflation Reduction Act, the industry's been hoping for some adjustment to those,” Gardner said. “We're still, unfortunately, left waiting for more certainty around all this.” 

There is less fear of Department of Governmental Efficiency-like cuts impacting the drug approval process, which is so important to industry performance. In 2002, the industry struck a deal with the Food and Drug Administration under which the industry would pay higher fees to support increased staffing for drug and medical device evaluation. The reasoning goes that cutting these roles, which get funded in part by the industry, wouldn’t be cost-saving measures. 

There was a sentiment that Trump’s policies in his first term were broadly beneficial for the industry, Gardner said. The industry hopes, despite some shifts in regulatory philosophy and goals, that history repeats itself.