It’s time to offer up some predictions for 2025. Spoiler alert, they’re not particularly positive expectations, for the economy or public health. But before I get to that, a few words on prognosticating. Crystal ball gazing is invariably a dubious activity, especially in areas such as the economy, public health and politics that are so prone to confounding factors. Despite this, it can be a useful exercise. And it’s interesting to analyze from year to year what I predicted correctly and what I got wrong.
As a health economist writing on the Forbes platform, my so-called swim lanes are healthcare and public health. But given the impact that politics and the economy have on the healthcare sector I also closely follow developments in the United States and global economy and political sphere. We’ll start there.
I thought Trump would fairly easily win the presidential election. Also, just as in my 2022 and 2023 forecasts, I predicted that the economy wouldn’t go into recession in 2024 but that inflation also wouldn’t come down to 2% and would slowly rise again by the end of the year. While I was off by a few decimal points on the unemployment figure, I did forecast diminishing job gains by the 4th quarter.
If Trump makes good on his promises, my economic outlook for 2025 includes reduced growth, modestly rising unemployment and elevated inflation. As tariffs take hold, inflation will continue to tick upward towards 4% on an annual basis by year’s end. A possibly more problematic feature could be the impact tariffs have on the U.S. industries that are reliant on imported raw materials and semi-finished products. I foresee a stalling of manufacturing and an increase in unemployment, edging up to 5.5% or maybe even 6% by the end of the year. The economy won’t technically be in recession, but its growth may diminish to a sluggish 1% by the 4th quarter.
Deportation of undocumented workers could lead to rising nominal wages. In itself higher wages are good. But they can also exacerbate the problem of inflation, as companies pass on higher labor costs onto consumers. Austerity measures, including diminished government investment, may take a toll on the economy, along with stubbornly high interest rates. I expect the average 30-year mortgage rate to rise to over 7% by year’s end. And what’s perhaps more detrimental to the economy’s prospects is the high degree of uncertainty, domestically and abroad.
The shake-up within the healthcare establishment in the federal government under the next Trump administration could cause enhanced vaccine hesitancy, a slowing down of infectious disease drug development and a renewed push for international price referencing for prescription drugs in Medicare.
The Food and Drug Administration’s novel approvals numbered 50 in 2024, comparable to the the figure of 55 in 2023. Given what’s in the pipeline, next year’s numbers will likely be similarly robust with a continued dominance of cancer and orphan disease drugs and therapies.
The bigger story with prescription drugs, however, may be their historically high launch prices. For well over a decade, there’s been a sharply upward trajectory in the launch prices of newly marketed brand-name drugs. The median annual list price for a newly approved drug was $300,000 in 2023, according to a Reuters analysis of 47 medicines, up from $222,000 a year before. Though once the numbers for 2024 are fully analyzed the increase in price won’t be quite as steep, the upward trend will probably continue into the foreseeable future.
The failure to include pharmaceutical pricing reforms in the end-of-year continuing resolution in 2024, despite apparent bipartisan support, may be a sign of further political fracturing among lawmakers in 2025. The legislation cut from the continuing resolution included drug patent reform addressed at reducing the number of patents pharmaceutical companies can claim regarding biologics; delinking of pharmacy benefit manager revenue from drug prices in Medicare, curbing incentives that can lead PBMs to steer patients toward more expensive medicines; and transparency requirements that mandate PBM reporting to Medicare on drug pricing and other information.
A modest rebound in life expectancy in 2023 is welcome news, but the U.S. still lags far behind all of its peers. For decades the U.S. has failed to effectively address its major public health issues that are primary causes of sluggish growth in life expectancy. These include extraordinarily high numbers of deaths from fentanyl and other illicit drugs, worsening infant and maternal mortality and increasing numbers of traffic deaths, suicides and gun fatalities, as well as sustained high levels of mortality attributed to obesity.
As the Make America Healthy Again movement under RFK Jr. gains in visibility, there will be proposed changes on the nutrition front, But judging from past experiences, it could turn out to be largely symbolic.
Banning a food additive here or there or the use of certain pesticides won’t get us to where we want to go. While welcome policy measures, they’re not core issues underlying obesity and chronic disease in America. The fundamental problems relate to a relatively poor diet in America and portion sizes that are disproportionately large, as well as a general lack of everyday physical exercise.
Furthermore, while RFK Jr. talks about the need to change what we eat and introduce more physical activity into our daily routine, this isn’t new. Others before him in other administrations have done so, to no avail. It would take an unlikely revolution to alter ingrained habits, but also the food and beverage industries’ business practices.
More importantly, overall, fewer resources are being allocated to disease prevention and preventive causes of premature deaths. Public health’s share of total health expenditures has been falling for two decades, from 3.18% in 2002 to 2.40% in 2023. I don’t see any signs of a reversal on the horizon, especially in light of a second term for Trump.
Moreover, the persistent problems of un- and underinsurance will worsen and exacerbate already existing inequities in the healthcare system.
Going forward, a politically polarized country isn’t a recipe for positive change with respect to healthcare and public health. To be sure, money will still be made in the healthcare sector, but this won’t necessarily benefit public health.
