The changing US regulatory environment: Amid Chaos, Signs of Opportunity

Nordic life science businesses, investors, and researchers should not be deterred by perceptions of a turbulent regulatory environment accompanying the recent change in presidential administrations, according to experts.

“In the past, many perceived the FDA [the US Food and Drug Administration] as an imposing authority, believing it was overly stringent or adversarial. However, the reality is quite the opposite as the FDA is, in fact, a constructive and collaborative regulatory body,” says Claudia Hidou, M.Sc, MIB, Head of Life Sciences and Healthcare for the Americas at Business Sweden. Business Sweden is known more formally as the Swedish Trade and Invest Council, which is partially owned by the Swedish government.

With increasing regulatory complexities in the European market, many companies are bypassing Europe altogether and opting to engage directly with the FDA.

“There is a growing perception that the FDA operates with greater agility and efficiency compared to European regulators, likely due to the role of notified bodies in Europe. With increasing regulatory complexities in the European market, many companies are bypassing Europe altogether and opting to engage directly with the FDA,” she adds.

Claudia Hidou, Americas lead, Life Science & Healthcare, Business Sweden

“The European Union doesn’t have enough notified bodies that have been accredited under Europe’s In Vitro Diagnostics Regulation (IVDR) to perform audits, so they delayed the compliance dates. Any new products have to be approved under the IVDR, whereas for existing products, there’s a whole grandfathering period. Their audit would be a quality system inspection, but also a technical file audit. In my experience talking to notified bodies, it takes them nearly 18 months to come and audit you. It’s kind of a bottleneck,” explains Amanda Ostrander, Principal at Nashville-based Integrated GXP Solutions, who consults on molecular testing, assay development, validation, and commercialization.

The 510(k) pathway

There are other reasons Nordic companies want to do business in the US, according to Business Sweden’s Hidou.

“For instance, the FDA offers the 510(k) pathway, which allows companies to seek approval by demonstrating that their device is substantially equivalent to an existing, previously authorized product. This framework enables firms to streamline the regulatory process by leveraging prior approvals,” she explains.

“Additionally, the FDA provides a program for small businesses that significantly reduces the 510(k)-application fee from USD 24,335 to USD 6,084. In contrast, the EU seems to lack an equivalent regulatory mechanism.”

The US is also part of the Medical Device Single Audit Program, along with Australia, Brazil, Canada, and Japan, Hidou says.

Increase in user fees

Other stakeholders find the perceived unpredictability of the last few weeks frustrating.

“It’s rather inflammatory to hear the Trump administration say, ‘We should just get rid of user fees.’ The first Trump administration said it should be ‘all user fees,’” notes Remy Mason, Ph.D, Principal, Co-Head Health and Life Sciences at BGR Group in Washington, D.C.

It’s rather inflammatory to hear the Trump administration say, ‘We should just get rid of user fees’. The first Trump administration said it should be ‘all user fees’.

Mason spoke at a panel session entitled ‘Policy Outlook: Navigating a New Congress and Executive Branch’ at the 2025 BIO CEO and Investors Conference on February 11 in New York City.

Remy Mason, Principal, BGR Group. Photo: Frank Ahrens

The Prescription Drug User Fee Act has been reauthorized seven times, but with rumors of a 50% cut to FDA funding, companies may be facing a 27% increase in user fees. 

Finding ways to insulate from regulatory variability

One factor insulating the healthcare industry from the vagaries of political life may be science itself. “The FDA is pretty consistent in approving companion diagnostics and types of products like Herceptin. I don’t see that changing as long as the science keeps evolving,” says Prof. Jordan Paradise, JD, Faculty Director at the Beazley Institute for Health Law & Policy at Loyola University School of Law in Chicago.

Another stabilizing factor may be section 553 of the US Administrative Procedure Act.

I. Glenn Cohen, Deputy Dean, Harvard Law School. Photo: Niles Singer/Harvard University

“It is possible through the process described in the Congressional Review Act that Congress and a new President will pass a joint resolution of disapproval of some rule, called ‘midnight rules,’ that are promulgated towards the end of the administration. The important point here is that the so-called ‘look back’ period would apply to any regulation finalized after August 1, 2024,” says Deputy Dean I. Glenn Cohen, JD, Faculty Director at the Petrie-Flom Center for Health Law Policy, Biotechnology & Bioethics at Harvard Law School.

Pres. Trump can’t use the Congressional Review Act to overturn the LDTs regulation, so without relying on litigation, the only way to do so is to go back through the original notice-and-comment rule-making process, and publish a notice in the federal register.

Hence, the FDA final regulation on in vitro diagnostics (or ‘laboratory-developed tests’, LDTs), which was finalized on May 6 of 2024, is well-within the safety zone, but the regulation on menthol cigarettes, which took decades to enact, is not.

Jordan Paradise, Faculty Director, Beazley Institute for Health Law & Policy. Photo: Chris Guillen

“Pres. Trump can’t use the Congressional Review Act to overturn the LDTs regulation, so without relying on litigation, the only way to do so is to go back through the original notice-and-comment rule-making process, and publish a notice in the federal register,” explains Paradise.

US-Sweden collaboration

And while the Trump Administration may have recently deleted a substantial amount of statistical medical data from the website of the Centers for Disease Control, that isn’t a problem in Scandinavia.

“Sweden has a host of health data, which could be very interesting for US companies,” according to Business Sweden’s Claudia Hidou.

Despite impending regulatory and policy changes, Nordic companies continue to find strong opportunities for engagement in the US market, she says.

“In March of last year, Sweden and the United States entered into a bilateral cooperation agreement focused on cancer research and care. This new agreement builds upon the 2016 accord between the two nations, aimed at accelerating research breakthroughs through enhanced collaboration and knowledge exchange,” says Hidou.

While the new administration may introduce some challenges, the US remains and will continue to be the largest and most sought-after market for Nordic companies.

She emphasizes that Team Sweden in the US – including the Consulate General in San Francisco and New York, the Embassy in Washington, D.C., and Business Sweden – intends to leverage the agreement to establish a dedicated platform for US-Sweden collaboration on cancer research.

“The ties between our countries remain strong, and our goal is to further deepen the exchange of knowledge and expertise,” Hidou notes, “While the new administration may introduce some challenges, the US remains and will continue to be the largest and most sought-after market for Nordic companies.”