{"id":108017,"date":"2025-02-10T08:02:51","date_gmt":"2025-02-10T16:02:51","guid":{"rendered":"https:\/\/xira.com\/p\/2025\/02\/10\/could-the-trump-administration-change-the-medicare-drug-price-negotiation-program\/"},"modified":"2025-02-10T08:02:51","modified_gmt":"2025-02-10T16:02:51","slug":"could-the-trump-administration-change-the-medicare-drug-price-negotiation-program","status":"publish","type":"post","link":"https:\/\/xira.com\/p\/2025\/02\/10\/could-the-trump-administration-change-the-medicare-drug-price-negotiation-program\/","title":{"rendered":"Could The Trump Administration Change The Medicare Drug Price Negotiation Program?"},"content":{"rendered":"

The post Could The Trump Administration Change The Medicare Drug Price Negotiation Program?<\/a> appeared first on Above the Law<\/a>.<\/p>\n

In his first month as president, Donald Trump and his administration have gleefully dismantled many of former President Joe Biden\u2019s initiatives. However, there has been one notable exception: the Medicare Drug Price Negotiation Program \u2014 although they\u2019re leaving room for some potential changes.<\/p>\n

The program, created under the Inflation Reduction Act (IRA), allows the federal government to negotiate the prices of some of the costliest Medicare Part D drugs directly with drug companies. The first 10 drugs selected for negotiation were announced<\/a> in August 2023, and the negotiated prices will take effect in 2026. An additional 15 drugs were added<\/a> in January in the final days of the Biden administration, and these negotiated prices will go into effect in 2027.\u00a0<\/p>\n

In a statement<\/a> released last week, the Centers for Medicare and Medicaid Services said that lowering the cost of prescription drugs is a top priority for the Trump administration. CMS added that the agency \u201cis committed to incorporating lessons learned to date from the program and to considering opportunities to bring greater transparency in the Negotiation Program.\u201d It plans to seek input from stakeholders on ways to improve the program.<\/p>\n

This statement, however, has some Democratic senators worried. In a letter<\/a> sent to RFK Jr. last week, 13 senators argued that the \u201cTrump Administration\u2019s statement is far from an embrace of drug price negotiation and appears to be opening the door to changes that could undermine Medicare\u2019s ability to get the best price possible on drugs.\u201d\u00a0<\/p>\n

So what legally could the new administration change?<\/p>\n

\u201cBy means of the rulemaking process and in how it interprets the IRA, CMS could potentially make significant changes to the negotiation program requirements \u2014 in other words, the structure of the negotiation program could be materially impacted, for example, by rulemaking that changes the process timeline or number of meetings between the parties, without Congressional approval,\u201d said Matthew I. Kupferberg, a partner in Frier Levitt\u2019s Life Sciences\u00a0Group. This means that CMS could accelerate the negotiation process, reduce the opportunity for manufacturers to respond to CMS offers or make other changes.\u00a0<\/p>\n

The IRA has also been challenged in court.Numerous drugmakers have filed lawsuits<\/a> against the negotiation program, including Novo Nordisk, Bristol Myers Squibb and AstraZeneca. Currently, nine of these lawsuits are ongoing, according to KFF<\/a>.\u00a0<\/p>\n

If the Department of Justice ends up dropping opposition to the lawsuits, the judge could decide the matter without opposition, the parties could work out an agreement to revise the regulations or they could ask the court to send the case back to CMS to make changes, Kupferberg said. If the IRA is invalidated, this gives the Trump administration an opportunity to come up with their own drug reform.<\/p>\n

\u201cThe administration could take a much harder stance, demanding a deeper discount, or take a completely different approach by saying, \u2018No, link the price of drugs up to a basket of averages around the world,\u2019 international reference pricing,\u201d he said. \u201cThey could do that, or they could come back, for example, and do rebate reform.\u201d International reference pricing is a method used to set the price of a drug in one country by comparing it to the prices of the same or similar drugs in other countries.<\/p>\n

As for the drugs already selected for negotiation, that list is unlikely to change because the drugs are selected based on specific criteria in the IRA (including time on the market and having no generic or biosimilar alternative), according to Kupferberg. The prices already negotiated also likely won\u2019t change as that would \u201cmeet fierce resistance\u201d and the IRA does not allow for such retroactive changes within the statute.<\/p>\n

Although the new administration may make changes to the program, \u201cactual repeal of the law, which had broad bipartisan support, is politically risky, and may not succeed,\u201d Kupferberg noted.<\/p>\n

Ultimately, however, it\u2019s very difficult to predict for sure how the Trump administration will move forward with the Medicare Drug Price Negotiation Program, according to Tricia Neuman, senior vice president of KFF and executive director of its Program on Medicare Policy.<\/p>\n

\u201cHis pick for HHS Secretary [RFK Jr.] has said he intends to implement the law, but that leaves open the question about whether the Administration will defend the program in the various lawsuits filed by the pharmaceutical industry,\u201d she said. \u201cIt also leaves open the question about whether and how the Trump administration will take action on drug prices. The Administration could double down on the program to help Medicare beneficiaries get a better deal on drug prices, or respond to industry concerns by weakening some of the provisions, or take an entirely different tack.\u201d<\/p>\n

Neuman noted that Trump has been open to other reforms addressing drug prices, including tackling the practices of pharmacy benefit managers, which are not part of the negotiation program. However, how the administration will approach this remains unclear.<\/p>\n

What do healthcare advocates want?<\/strong><\/p>\n

Patient advocacy organization Patients for Affordable Drugs was cautiously optimistic about CMS\u2019 announcement last week.<\/p>\n

\u201cThe statement could have said, \u2018We\u2019re going to no longer negotiate.\u2019 If you look at the actions of the administration, it\u2019s not afraid to take aggressive action if it chooses to,\u201d said David Mitchell, founder and president of the organization. \u201cIn this case, it said they\u2019re going to continue with negotiation and with a goal of achieving greater value for beneficiaries and taxpayers while continuing to foster innovation. Those are the goals of our organization. So we see this as potentially positive. Now, the devil\u2019s in the details, because they also referenced in the statement incorporating lessons learned to date. Whose lessons?\u201d<\/p>\n

Patients for Affordable Drugs was strongly in favor of the Biden administration\u2019s efforts in the Medicare Drug Price Negotiation Program. Mitchell said that he thinks the current program is strong and that he wouldn\u2019t change anything. That said, if the new administration conducts a negotiation that\u2019s \u201con par or better\u201d than what the Biden administration achieved with the first 10 drugs, then that\u2019s a win for Patients for Affordable Drugs.<\/p>\n

Although the organizationdoesn\u2019t see a need for change within the negotiation program, the National Community Pharmacists Association (NCPA) does. NCPA represents over 18,900 pharmacies in the U.S. CEO B. Douglas Hoey said the association isn\u2019t opposed to the intention of the program, but said the way it\u2019s implemented will put significant financial strain on community pharmacists.<\/p>\n

NCPA released a report<\/a> last week showing that pharmacies will experience prescription payment settlement delays of at least seven additional days for negotiated drugs because of the program. Regulations for the program state that the manufacturer must send the refund for the prescription within 14 days of receiving eligibility confirmation for the patient, rather than ensuring the pharmacy gets the reimbursement within 14 days of dispensing the prescription. Each pharmacy could lose nearly $11,000 in weekly cash flow due to delayed payments. Because of these challenges, a recent survey from NCPA revealed<\/a> that 93.2% of independent pharmacies are considering or have already decided not to stock at least one of the first 10 drugs included in the program.<\/p>\n

\u201cOur members are saying, \u2018We just won\u2019t be able to carry the drug,\u2019 which of course, thwarts the intended purpose of trying to get these drugs at a lower price to seniors,\u201d Hoey said. \u201cIf the pharmacies are going to go out of business by carrying them, it\u2019s a major, unintended consequence.\u201d<\/p>\n

To alleviate these challenges, the association is calling for several changes to the program, including ensuring there is no delay in payments for pharmacies.<\/p>\n

The Council for Affordable Health Coverage, an advocacy organization focused on reducing healthcare costs, would like to see a more drastic change: a repeal of the IRA. The IRA is failing, declared Joel White, president of the organization.<\/p>\n

\u201cWe support repealing the IRA and its price controls \u2014 enacting a real out-of-pocket cap on drug costs for seniors that doesn\u2019t raise premiums or limit drug coverage, and pledge to not use Medicare to pay for other priorities like green energy tax credits,\u201d he said in an email. \u201cCongress should immediately end the pill penalty, which imposes price controls on drugs sooner than biologics. This misguided policy is shifting new drug development into more expensive biologics, which increases patient out-of-pocket costs and makes it harder to get their treatment.\u201d<\/p>\n

However, the chances of a repeal actually happening are extremely unlikely, according to Frier Levitt\u2019s Kupferberg.<\/p>\n

\u201cAt this point, the Administration has only indicated that it intends to stay the course with the drug negotiation process, subject to a rather vague commitment to render the process more transparent and inclusive. \u2026 The only thing I think is certain is that there will be no repeal attempt in the near future, and drug cost reduction will remain in play,\u201d he said.<\/p>\n

Photo: bong hyunjung, Getty Images<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

The post Could The Trump Administration Change The Medicare Drug Price Negotiation Program? appeared first on Above the Law. In his first month as president, Donald Trump and his administration have gleefully dismantled many of former President Joe Biden\u2019s initiatives. However, there has been one notable exception: the Medicare Drug Price Negotiation Program \u2014 although […]<\/p>\n","protected":false},"author":3,"featured_media":108018,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[16],"tags":[],"class_list":["post-108017","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-above_the_law"],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/xira.com\/p\/wp-content\/uploads\/2025\/02\/GettyImages-1026909904-x1Xeg5.jpeg?fit=724%2C483&ssl=1","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/posts\/108017","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/comments?post=108017"}],"version-history":[{"count":0,"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/posts\/108017\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/media\/108018"}],"wp:attachment":[{"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/media?parent=108017"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/categories?post=108017"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/tags?post=108017"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}