Core Viewpoint - The healthcare and pharmaceutical industries in the U.S. are expected to face increasing political and economic risks by 2025, with pricing power and balance sheet flexibility being crucial for maintaining ratings [3][8]. Mergers and Acquisitions - The total value of healthcare industry mergers and acquisitions has reached $61.3 billion year-to-date, showing a slight increase from $58.3 billion in the same period last year, primarily driven by significant deals such as Johnson & Johnson's $14 billion acquisition of Intra-Cellular Therapies [4]. - The top ten M&A transactions have increased by 14%, and excluding the largest deals, the growth rate approaches 40%, indicating a potential shift in the M&A landscape under a new Republican administration, which is generally more favorable to such activities [4]. Supply Chain and Tariff Risks - By 2025, supply chain risks may resurface due to escalating trade tensions, potentially increasing input costs, particularly for pharmaceutical companies reliant on imported active ingredients [6]. - Generic drug companies may face higher tariff risks compared to brand-name companies due to their lower profit margins, while medical device companies generally enjoy better pricing flexibility [6]. Political and Regulatory Risks - The new U.S. government is likely to focus on three main areas of healthcare policy: insurance coverage, drug pricing, and transparency in drug benefit management, which may negatively impact revenues [8]. - Despite potential revenue pressures, most pharmaceutical companies are not expected to face significant rating pressures due to their financial flexibility, with major adjustments likely to be delayed [8].