Midterm elections could reshape pricing, regulation and growth for life sciences.
Key takeaways
Life sciences companies should prepare for policy shifts after the 2026 midterms.
Drug pricing, China exposure and AI oversight top post-election risks.
With the 2026 U.S. midterm elections approaching, RSM is looking at the economic stakes and the key issues for various industries. This article is part of that series.
The outcome of the 2026 U.S. midterm elections will help shape the policy landscape facing U.S. businesses through the remainder of the decade. Changes in congressional control, oversight priorities and state-level policymaking could influence everything from taxes and funding programs to regulation, workforce issues and investment decisions.
Here’s a look at the implications for life sciences businesses.
The top issue for life sciences
Although the life sciences industry is less directly exposed to election-driven demand shifts than many other industries, drug pricing and reimbursement policy remains its most significant source of strategic and financial uncertainty.
The current baseline includes implementation of the Inflation Reduction Act’s (IRA) Medicare Drug Price Negotiation Program, the administration’s most-favored-nation (MFN) pricing initiatives and the TrumpRx direct-to-consumer platform. These policies are intended to reduce patient and government spending, but they may also compress manufacturer revenue, reshape payer and formulary negotiations, and influence launch sequencing, portfolio valuations, research and development investment, and supply chain decisions. Branded pharmaceutical and biotechnology companies with high-cost, single-source products and significant Medicare or Medicaid utilization face the greatest exposure; pharmacy benefit managers, pharmacies and contract manufacturers may also experience operational or margin pressure as payment channels evolve.
In the near term, companies must manage negotiated-price implementation, reimbursement uncertainty and tariff-related costs. Over the longer term, international reference pricing and direct-purchase models could reshape U.S. commercialization economics and encourage domestic manufacturing and more selective pipeline investment.
Implications for future legislation
Congressional control after November will shape whether federal drug pricing policy is codified and expanded or continues primarily through agency action and oversight. Because affordability is a priority for both parties, the central question for life sciences companies is not whether the IRA’s Medicare negotiation program will continue—it is already setting prices for successive groups of high-spend drugs—but how broadly it will be extended and whether additional mechanisms, including MFN pricing, direct-purchase models and pharmaceutical onshoring incentives, gain traction.
Under unified Republican control, the administration would have a clearer path to codify voluntary MFN agreements and link pricing concessions to tariff relief and U.S. manufacturing commitments. Medicare negotiation would likely continue because implementation is already underway, although Congress could revisit program design or pursue targeted changes to product eligibility and investment incentives. Companies would need to reassess launch pricing, international price exposure, domestic manufacturing capacity and the economics of affected product portfolios.
Under a divided government, major statutory changes would be harder to enact, but bipartisan concern about affordability could still yield narrower provisions in must-pass legislation and more intensive oversight of manufacturers, pharmacy benefit managers and agency implementation.
States may continue advancing prescription drug affordability boards, transparency requirements and, in some jurisdictions, payment limits, creating greater variation across markets. Business leaders should plan for the Medicare negotiation timetable to continue while stress-testing exposure to potential federal expansion, litigation, tariffs, onshoring requirements and an increasingly fragmented state policy landscape.
Other key issues for life sciences
Beyond drug pricing, life sciences companies face growing scrutiny of China-related supply chains, partnerships and investment activity. The expansion of cross-border licensing and investment involving China’s biotechnology sector has prompted policymakers to focus more closely on national security, data access and transfers of intellectual property and technical know-how. The BIOSECURE Act, enacted in December 2025, restricts certain federal procurement and grants involving biotechnology companies of concern, requiring affected businesses to evaluate vendors, contract terms and supply chain dependencies. The proposed bipartisan Biotech Investment National Security Act of 2026 would go further by bringing certain U.S. pharmaceutical licensing agreements, joint ventures and equity investments involving covered Chinese entities within the federal outbound investment screening framework. Together, these measures could increase diligence requirements, lengthen transaction timelines and influence sourcing, partnering and pipeline strategies.
The Prescription Drug User Fee Act VIII (PDUFA) reauthorization is another significant post-election issue for the industry. The current authorization expires in September 2027, requiring the Congress seated after the midterms to renew the U.S. Food and Drug Administration’s authority to collect prescription drug user fees for fiscal years 2028 through 2032. Because PDUFA is must-pass legislation, the election outcome could determine which party controls the relevant committees and has greater leverage over FDA review resources, performance commitments, sponsor interactions and oversight priorities.
The package could also become a vehicle for broader drug development, regulatory or enforcement provisions. Unified control could streamline negotiations and advance the majority party’s priorities, while a divided government could narrow the package or delay agreement as lawmakers seek concessions. For middle market pharmaceutical and biotechnology companies, changes in timing or scope could reduce review predictability and affect development timelines, financing needs and launch plans. Congressional leadership, negotiating priorities and the FDA’s proposed commitments will therefore be important to monitor.
Artificial intelligence adoption in life sciences is also outpacing the policy frameworks governing its use. As AI expands across drug discovery, clinical development, manufacturing and regulatory review, the FDA has issued draft guidance and guiding principles designed to promote transparency, risk management and regulatory consistency.
The midterm elections could influence whether Congress supports a flexible, innovation-oriented federal approach or increases oversight of patient safety, data privacy and AI use in clinical development. A divided government may limit comprehensive legislation while shifting activity toward agency oversight, appropriations and state-level requirements, increasing the risk of a fragmented compliance landscape.
Middle market companies may be particularly exposed because limited compliance resources, reliance on third-party vendors and less mature data infrastructure can raise implementation costs and slow adoption. Companies that establish proportionate governance frameworks, clarify vendor responsibilities and document how AI tools are developed, validated and monitored will be better positioned to capture efficiency gains while adapting to federal and state policy changes.
By the numbers
Drug pricing remains a bipartisan issue and a priority for American voters. A Wall Street Journal poll of 1,500 registered voters found broad bipartisan support for measures to lower prescription drug costs. Capping maximum prescription drug prices was supported by 94% of Democrats, 86% of Republicans and 88% of independents, while a government website offering discounted prescription drug prices was supported by 76% of Democrats, 75% of Republicans and 63% of independents.
What middle market businesses should consider now
Middle market life sciences companies should model the financial effects of alternative drug-pricing scenarios, stress-test product and pipeline economics, and map exposure to China-related suppliers, partners and transactions. They should also review AI governance, data controls and vendor responsibilities to ensure that documentation and oversight can scale with evolving FDA and state requirements. Planning should account for the timing of agency action, PDUFA VIII reauthorization, tariffs, domestic manufacturing requirements and differences among state policies.
The election may change the pace or mechanism of policy more than its overall direction. Companies that build flexible compliance, sourcing, financing and investment plans now will be better positioned to respond without disrupting growth or innovation.
RSM contributors
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