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The Healthcare Cost Curve Is Heading the Wrong Way
Rising medical costs are tightening healthcare economics just as capital concentrates in North American VC and LEO Pharma puts $435M behind its next growth opportunity in EPP.
Gaston Brizuela Bosio
August 20, 2026
Good morning, ! This week we’re diving into the continued increase of the medical costs rates, North America VC deal value, and LEO Pharma taking on EPP with $435M deal.
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— The Healthcare150 Team
MICROSURVEY
Which lever has the greatest potential to improve hospital margins over the next 3 years? |
TREND OF THE WEEK
Medical Costs Rate Are Structurally Increasing
U.S. medical cost growth has returned to levels not seen since the financial crisis. PwC projects group medical costs to rise 9.0% in 2026 and again in 2027, up from 5.5% in 2022 and matching the highest sustained rate since 2009. Individual plans follow close behind at 8.5%.
The more important signal is persistence. After medical cost growth bottomed at 5.5% in 2017, the post-pandemic trajectory has moved structurally higher. The brief reset in 2022 did not hold, with group cost growth rebounding to 8.0% in 2023 and 8.5% in 2024 and 2025.
Why it matters: sustained 8.5% to 9.0% inflation creates pressure across the healthcare value chain. Employers and payers face tougher benefit and pricing decisions, while providers enter negotiations in an environment where affordability is increasingly constrained.
For investors, the opportunity shifts toward businesses that can demonstrate measurable cost reduction, not merely incremental clinical or operational improvement.
Bottom line: Medical inflation no longer looks like a temporary spike. At 9.0%, cost containment is becoming a strategic priority again. (More)
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DEAL OF THE WEEK
LEO Pharma Bets $435M on Rare Disease
LEO Pharma is betting up to $435M on dersimelagon, acquiring global rights to Tanabe Pharma’s late-stage treatment for erythropoietic protoporphyria (EPP) and X-linked protoporphyria (XLP), two rare dermatological diseases.
The strategic logic is straightforward: rather than spending years and significant capital developing an early-stage asset, LEO is paying for a potentially de-risked, regulatory-ready product that could strengthen its rare-disease portfolio. The transaction comes as pharmaceutical investors increasingly favor later-stage assets and proven technologies over high-risk early innovation.
That makes the deal more than a licensing transaction. It reflects a broader shift in pharma capital allocation: buying clinical certainty is becoming an increasingly attractive alternative to building it internally.
For investors, the key question is whether the premium paid for late-stage innovation can be justified by the commercial opportunity and probability of approval.
Bottom line: In a biotech market where capital remains selective, LEO is putting $435M behind a simple thesis: when the science is sufficiently de-risked, pharma is willing to pay for time.
DEAL TRACKER
Undisclosed | Hg → Nourish Care
Hg agreed to make a growth investment in Nourish Care, with existing investor Livingbridge retaining a minority stake. The investment supports the continued expansion of Nourish Care’s digital platform for care management and elderly care, tapping into the growing demand for technology-enabled care delivery. Read more
$275M | BioMarin → Alesta Therapeutics
BioMarin agreed to acquire Alesta Therapeutics for $275M, gaining access to ALE1, an oral investigational therapy targeting hypophosphatasia, a rare metabolic bone disease. The deal expands BioMarin’s rare-disease pipeline and adds a potentially differentiated oral treatment to its portfolio. Read more
Undisclosed | Medbase → Ardentis
Medbase agreed to acquire a majority stake in Ardentis from Columna Capital, following Columna’s expansion of the dental platform from 10 to 20 clinics. The transaction represents a strategic exit after doubling the platform’s footprint and reinforces the ongoing consolidation of European dental services. Read more
Undisclosed | Providence Equity Partners → CheckedUp
Providence Equity Partners agreed to acquire a majority stake in CheckedUp, alongside co-founders Richard and Mark Awdeh and strategic minority investor Varsity Healthcare Partners. CheckedUp reaches 17,000+ specialty healthcare providers and 15M patients, giving Providence a scaled platform in point-of-care healthcare engagement. Terms were not disclosed. Read more
REGIONAL FOCUS
North America's Healthcare VC Reset Nears Its Turning Point
North American healthcare venture funding is still running well below its pandemic-era high, but PitchBook's 2026 outlook frames the coming year as an inflection point rather than another leg down.
Biopharma remains the anchor of the region's healthcare VC, but the market has roughly halved since 2021. Biopharma deal value slid from a $33.5B peak to $18.0B in 2025, healthtech from $20.4B to $9.5B, and medtech from $10.8B to $7.3B. Early-stage capital has thinned in particular—just 13.4% of biopharma deals this year went to pre-seed/seed, below the 17.5% five-year average—as investors crowd into de-risked, clinical-stage assets.
Why it matters: PitchBook sees AI as the catalyst that pulls capital back, expecting overall probability of technical success to climb from roughly 8% to 18% and return profiles that beat the 19.5% IRRs of the 2012–2014 vintage. But the rebound leans on rate cuts, a thawing IPO window, and GLP-1 M&A—and China is already taking share of biotech exits.
Bottom line: North America still dominates healthcare VC, but 2026 will test whether AI-driven de-risking can revive the early-stage assets where returns—and competitive pressure—are greatest.
