In this week’s edition of InnovationRx, we look at the impact of tariffs on healthcare costs, pioneers of treating MS, AI for clinical decision-making, and more. To get it in your inbox, subscribe here.
Last week, Trump made good on a core campaign promise to enact sweeping tariffs, slapping a baseline of 10% tax on imports from every country, with many others singled out for harsher rates, with China now set at 108%. While pharmaceuticals were spared at first, on Tuesday President Trump said that “a major tariff” on pharmaceuticals would be announced soon. It’s now only a question of when and how hard they will hit.
When they do, one of the biggest losers would likely be generic drug manufacturers. Since they account for about 90% of all prescriptions in the United States, a huge segment of Americans who rely on them. About 47% of all generics prescribed in the U.S. are made in India, which is currently facing a 26% tariff. For some generics, costs could become excruciatingly high. ING analyst Diederik Stadig estimated that a 24-week course of generic cancer medication could see cost increases of as much as $10,000 under a 25% tariff.
Mark Cuban, whose Cost-Plus Drug Company manufactures and sells generic drugs, such as penicillin imported from Portugal, told Forbes that any costs elevated by tariffs will absolutely be passed through to patients. “With only a 15 [percent] markup, we can’t absorb any additional costs,” he said.
Meanwhile, despite months of aggressive lobbying, medical device makers did not get a carveout. And with perhaps 40% of all devices manufactured overseas, they’re likely headed for a heavy hit that will ripple out through device manufacturers, hospitals, insurers and the millions of people whose health relies on them. Mexico, where the tariff rate has been set at 25%, is a major hub for manufacturing, while other devices are made in Europe, where the rate is now 20%. That means items like pacemakers, insulin pumps and hearing aids are likely to get more expensive.
These increases could be significant for healthcare systems around the country. As Erik Wexler, CEO of Providence, a non-profit Catholic health system based near Seattle that includes 51 hospitals, said: “Potential cuts to Medicaid on top of tariffs will cripple health systems across the country, which could create a national emergency in terms of access to health care, especially for those who are most vulnerable.”
Multiple Sclerosis Pioneers Awarded 2025 Breakthrough Prize
Stephen Hauser and Alberto Ascherio, two pioneers in the study of multiple sclerosis, received one of the $3 million Breakthrough Prizes in Life Sciences last week. The money for the awards comes from the Breakthrough Prize Foundation, founded by Yuri and Julia Milner, as well as from Mark Zuckerberg, CEO of Meta, and Priscilla Chan; Google cofounder Sergey Brin and 23andMe cofounder Anne Wojcicki.
MS is a progressive autoimmune disease where the body’s own immune system attacks myelin, the protective cover that surrounds nerve fibers, disrupting interactions between the brain and the rest of the body. This can result in patients eventually losing the ability to walk or move.
Hauser, a neurologist at the University of California San Francisco, was recognized for his key discovery for MS. For decades, the prevailing wisdom was that rogue T-cells were responsible for the damage seen in MS patients. Hauser became skeptical of the conventional wisdom, when he realized that the animal models being used to study MS didn’t line up with what he observed in his own MS patients, he told Forbes. He and his colleagues eventually determined that white blood cells called B cells were the actual culprit. That insight has led to new therapies that have revolutionized treatment for the disease.
Hauser credits the National Institutes of Health for enabling his work. “It’s the NIH that was the anchor for the science that has moved us in one generation from a time when a person with MS would be completely disabled within 15 years to today, where a person whose MS is just beginning can anticipate a life free from disability,” he said.
Ascherio, an epidemiologist at the Harvard T.H. Chan School of Public Health, received the prize for his discovery that MS is fundamentally caused by infection with Epstein-Barr virus–which is also the cause of mononucleosis. Proving this required an extraordinary rigorous study tracking the records of more than 10 million military servicemembers over time. Ascherio told Forbes he hopes this finding could eventually lead to an antiviral or even a vaccine against multiple sclerosis.
“A vaccine to prevent infections is challenging,” he said. “But if you could prevent infection, you could prevent MS.”
BIOTECH AND PHARMA
A new study found that using Fertilo, a stem cell-based fertility treatment developed by biotech company Gameto, in conjunction with in vitro maturation (IVM) more than doubled the rate of successful pregnancies compared to conventional IVM methods. The study, which has not yet been peer-reviewed, involved 40 patients and tested both safety and efficacy of the treatment. The company is currently enrolling patients into a phase 3 clinical study of Fertilo. In December, Gameto (founded by Forbes 30 Under 30 alumna Dina Radenkovic) announced the first birth of a baby conceived using the Fertilo treatment.
DIGITAL HEALTH AND AI
Can artificial intelligence rival doctors’ decision-making? A new study by researchers at Cedars-Sinai, Tel Aviv University and digital health startup K Health says yes—at least in certain circumstances. The new study, published in the peer-reviewed Annals of Internal Medicine, looked at the recommendations of K Health’s AI chatbot compared to those of the real-life doctors for patients who came to virtual urgent-care appointments with acute respiratory, urinary, vaginal, eye or dental symptoms. It found that the AI matched doctors’ clinical decisions in two-thirds of cases, and offered higher-quality care overall for the remaining one-third.
MEDTECH
Additive manufacturing firm 3D Systems said that it had 3D-printed the first high-performance plastic facial implant at the point of care. The custom medical device was used during a successful surgery in mid-March at University Hospital Basel in Switzerland.
PUBLIC HEALTH AND HOSPITALS
A new report from RAND highlights the precariousness of emergency departments in hospitals across the country. The report finds that ERs are increasingly dealing with more complex–and acute–medical issues. Meanwhile, payments are falling and sometimes even being withheld. The study’s authors recommend more funding to support emergency departments and greater investments in primary care to help reduce crowding.
Plus: RFK Jr. plans to tell the CDC to stop recommending fluoride, which strengthens teeth and reduces cavities, in drinking water across the country.
DEAL OF THE WEEK
Recently launched biotech firm RayThera raised $110 million led by Foresite Capital and OrbiMed Advisors to develop small-molecule therapies in immunology. The San Diego-based company will use the funds to move its drug candidates into Phase 1 clinical studies. Cofounder and CEO Qing Dong sold his previous startup, XinThera, which was working in the areas of oncology and inflammation, to Gilead in 2023 for an undisclosed sum.
Plus: GSK has entered into a licensing agreement with Korean biotech ABL for its neurological therapeutics in a deal worth up to $2.6 billion.
WHAT WE’RE READING
Measles outbreaks may be the new normal as the Trump Administration’s actions set the stage for a resurgence of the disease. A second child died of the disease over the weekend in Texas, where the number of cases has now risen above 500.
The Trump Administration won’t expand Medicare and Medicare coverage for GLP-1 drugs, rejecting a proposal from the Biden Administration to help people pay for the popular obesity drugs.
Over the past few decades, public health efforts have made HIV a manageable disease rather than a deadly one. The Trump Administration’s budget cuts threaten to change that.
Biotech startups are struggling as the NIH slashes funding.
Health insurance company stocks soared after the federal government announced that reimbursement rates for Medicare Advantage plans would increase by more than 5%.
Trump’s gutting of environmental programs could lead to worsening asthma attacks, increased ER visits and other big health problems for Americans.
Hinge Health considers delaying its IPO after Trump tariffs send markets plummeting.
Cuts at the FDA are so significant that they may prevent the government from spending user fees, which could significantly slow the drug approval process.
There’s currently no acting director of the CDC, as Susan Monarez had to step back from the role once Trump nominated her for the permanent director role. That means crucial decisions for the agency can only be made by HHS Secretary Robert F. Kennedy, Jr.
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