Healthcare & Life Sciences: Drug Pricing Digest — Number 49

Inflation Reduction Act, Healthcare Reform, and General Developments

“Most Favored Nation” Drug Pricing Policy Discussions Continue

The Trump administration is reportedly “in negotiation” with pharmaceutical manufacturers to voluntarily lower their prices based on the so-called most favored nation (MFN) pricing policy, with GLP-1 drugs possibly being a focus of price reductions.

Sources: Pink Sheet (first, second, third).

The MFN pricing policy was a main topic of discussion at the BIO International Convention held in Boston from June 16 to 19, 2025.

Sources: Scrip, Pink Sheet.

Commentators discussed the performance of pharmaceutical company stocks in relation to the proposed MFN policy, as well as the apparent lack of hesitation by lawmakers to trade in pharmaceutical shares.

Source: PoliticoPro.

Meanwhile, the Congressional Research Service issued a report titled “Most Favored-Nation Prescription Drug Pricing Executive Order: Legal Issues” which discusses possible pathways for implementing an MFN policy but does not add new details.

Check out the latest episode of the Latham Drug Pricing Podcast, in which guest Allan Thoen, Director and Associate General Counsel with Sandoz, joins Washington, D.C. partner Chris Schott and associate Danny Machado to discuss impressions and takeaways from the recent Pricing and Contracting USA Conference.

HRSA Uses Grant Award Terms to Extend 340B Prices to Patients

The Health Resources and Services Administration (HRSA) explained in a statement that the agency has issued “updated award terms requiring HRSA-funded health centers to provide insulin and injectable epinephrine to low-income patients at or below the price paid by the center through the 340B Drug Pricing Program.” This change is in response to Section 7 of the April 15 drug pricing executive order, which we discussed in issue No. 44 of this digest.

Sources: BloombergLaw, InsideHealthPolicy, 340B Report.

IRA Policy Discussions Continue

Commentators discussed how Medicare Part B and Part D rebates implemented by the Inflation Reduction Act (IRA) might prevent manufacturers from raising prices in response to potential tariffs.

Source: Pink Sheet.

A white paper by the University of Southern California Schaeffer Center for Health Policy & Economics suggests that the IRA’s maximum fair price requirement will result in increased drug costs for Medicare beneficiaries.

Source: InsideHealthPolicy.

Lawsuits Challenging the IRA Continue

Drug manufacturer litigation against the drug pricing negotiation program established under the IRA continues. The government made a supplemental authority filing in the US District Court for the District of Columbia.

Source: BloombergLaw.

Medicaid Drug Rebate Program (MDRP)

No developments to report. 

340B Program

Covered Entities Sue Plans, Alleging Underpayment

340B covered entities have filed suit against Medicare Advantage plans, claiming that the plans inappropriately limited reimbursement for drugs purchased at the 340B price. As discussed in issue No. 30 of this digest, on June 15, 2022, the Supreme Court unanimously held that it was unlawful for the Department of Health and Human Services (HHS) to implement a policy for CY 2018 and CY 2019 of lowering Medicare reimbursement for drugs purchased under the 340B program to average sales price (ASP) minus 22.5%, as opposed to ASP plus 6%, without having first conducted a survey of hospital acquisition costs for such drugs. The new covered entity litigation alleges that insurers had followed the HHS approach and also had limited reimbursement for 340B-purchased drugs. Covered entities are now seeking additional reimbursement amounts from the plans.

Sources: InsideHealthPolicy, Law360, 340B Report.

Rebate Model Guidance at OMB; Litigation Continues

With HRSA guidance regarding rebate models remaining at the Office of Management and Budget (OMB), various stakeholders have reportedly met with the Trump administration to discuss the issue.

Source: 340B Report.

Litigation regarding 340B rebate models, which was discussed in issues No. 46 and No. 47 of this digest, continues at the appellate level.

Sources: 340B Report (first, second, third).

Covered Entity Challenges to Manufacturer Audits Dismissed

The US District Court for the District of Columbia dismissed litigation filed by multiple covered entities seeking to halt audits being conducted by a manufacturer.

Sources: Law360, 340B Report.

Additional States Adopt Contract Pharmacy Laws

More states have enacted or proposed legislation that would bar drug manufacturers from restricting contract pharmacy access. Some bills would require covered entities to make disclosures regarding 340B discounts. We note that legislative action related to the 340B program may have occurred in other states but has not yet been reported in the trade press.

Sources: 340B Report (first, second, third, fourth, fifth, sixth).

Manufacturer Challenges to State 340B Laws Continue

Lawsuits challenging the 340B laws enacted by various states continue.

Sources: BloombergLaw, Law360, 340B Report (first, second, third).

Medicare Part B

CMS Publishes ASP Restatement and Discarded Drug Rebate Guidance

The Centers for Medicare & Medicaid Services (CMS) published four guidance documents. In connection with ASP restatements, CMS published a policy overview and a manufacturer’s guide. CMS also addressed the discarded drug rebate obligation in a program overview and a manufacturer quick reference.

With contributions to technical updates from Riparian.

Medicare Part D

No developments to report.

State Law Developments

Maryland PDAB Solicits Comments on Specific Drugs

The Maryland Prescription Drug Affordability Board (PDAB) is proceeding on the path toward potentially imposing price controls by publishing and asking for comments on “dossiers” for two drugs.

Source: InsideHealthPolicy.

Challenges to Arkansas Pharmacy Ownership Law Continue

Litigation challenging an Arkansas law that seeks to regulate the ownership of pharmacies continues.

Source: BloombergLaw.