Life Sciences Horizons Brochure 2025 - Flipbook - Page 36
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2025 Horizons Life Sciences and Health Care
Manufacturers beware: Trump “America First Trade Policy” could change
the “Buy American” landscape in 2025 for drug, biologic, and medical
device contracts
Just after taking the oath of office as president,
President Trump signed an Executive Order titled
“America First Trade Policy.” Viewing the EO in
conjunction with actions taken to increase domestic
procurement of “essential medicines” during the final
year of the first Trump administration, it is reasonable
to expect that “Buy American” preferences for
domestic supplies may soon be expanded on
acquisitions of pharmaceuticals, biologics, and medical
devices for U.S. Federal health programs.
The Executive Order primarily required that a review of existing
trade agreements impacting U.S. procurement be undertaken,
making the specifics and timing of any changes uncertain.
Manufacturers should keep a close eye on this issue over the
coming year, both to express any concerns to policymakers before
decisions are finalized, and to ensure they are positioned to
comply with – and maximize any potential benefit from –
the new requirements.
Domestic preferences – requirements to favor U.S.-made product
– have been a fact of life in U.S. government contracting since the
“Buy American Act of 1933.” This depression-era effort to protect
U.S. industry required application of a percentage premium to the
price of “foreign” offers during price evaluation to help steer
awards to U.S. industry. Over the years, Federal “Buy American”
requirements have expanded under both Republican and
Democratic administrations alike, with domestic manufacture
and content requirements being extended beyond the Federal
procurement context to apply to Federally sponsored state
government projects.
However, under various trade agreements, including the
seminal World Trade Organization Agreement on Government
Procurement, the U.S. has agreed to waive application of domestic
preferences vis-à-vis products of signatory countries, while
prohibiting access to non-signatory country products. These
efforts have removed obstacles U.S. companies have faced
when competing in foreign government tenders and also have
facilitated access to non-domestic products in U.S. health
programs. But, they inevitably dilute the impact of U.S.
domestic preferences.
The Trump “America First Trade Policy” executive order can be
viewed as a sign that trade agreement commitments giving
reciprocal access to national procurement to signatory countries
will be on the chopping block. This order could also be part of a more
expansive effort to expand the U.S. industrial base for drugs and
biotechnology. We will be closely watching Buy American efforts
over the coming year as the Trump administration’s plans unfold.
Joy Sturm
Partner
Washington, D.C.
Ashley Ruhe
Associate
Washington, D.C.
