Healthcare & Life Sciences: Drug Pricing Digest — Number 52

Inflation Reduction Act, Healthcare Reform, and General Developments

TRUMP PUSHES MFN PRICING POLICY IN LETTERS TO PHARMACEUTICAL MANUFACTURERS

President Trump sent identical letters dated July 31, 2025 to 17 pharmaceutical company executives, referencing the Most Favored Nation (MFN) pricing executive order, and “calling on … every manufacturer doing business in our great country” to take certain actions “within the next 60 days.” The actions include providing the “full portfolio of existing drugs at MFN rates for every single Medicaid patient,” contracting “with the United States to guarantee Medicare, Medicaid, and commercial payers receive MFN prices on all new drugs,” and participating in direct-to-consumer or direct-to-business “distribution models for high-volume, high-rebate prescription drugs so all Americans get the same low MFN prices that manufacturers already offer to third-party payers.” In addition, manufacturers should “negotiate harder with foreign freeloading nations,” with “increased revenues abroad … repatriated to lower drug prices for American patients … through an explicit agreement with the United States.”

The letters do not cite any legal bases whatsoever to support these demands, but nevertheless threaten that “if you refuse to step up, we will deploy every tool in our arsenal to protect American families from continued abusive drug pricing practices.”

Sources: BioWorld, BloombergLaw, InsideHealth (first, second), StatNews (first, second), Scrip, Reuters.

The trend of manufacturers adopting direct-to-consumer distribution models, which the MFN executive order also called for, continues. 

Sources: Scrip (first, second), Bloomberg.

Meanwhile, discussion continues in Congress of the MFN policy and international reference pricing more generally.

Source: InsideHealth.

LAWSUITS CHALLENGING THE IRA CONTINUE

Drug manufacturer litigation against the drug pricing negotiation program established under the Inflation Reduction Act (IRA) continues.

Sources: PoliticoPro (first, second, third), Law360 (first, second, third), InsideHealthPolicy, The Hill, BioWorld.  

Medicaid Drug Rebate Program (MDRP)

No developments to report. 

340B Program

HRSA RELEASES REBATE MODEL PROPOSED GUIDANCE

The Health Resources and Services Administration (HRSA) has published a notice “to announce the availability of a 340B Rebate Model Pilot Program as a voluntary mechanism for qualifying drug manufacturers to effectuate the 340B ceiling price on select drugs to all covered entities, and to collect comments on the structure and application process of the 340B Rebate Model Pilot Program.” Comments on the proposed notice are due no later than September 2, 2025, but HRSA notes that it “will consider comments received but is under no obligation to respond to or act on the comments.”

The proposed model is limited to drugs subject to IRA price negotiations, “regardless of payer.” Specifically, the “first call to submit plans for … review is for the manufacturers with Medicare Drug Price Negotiation Program … Agreements … for initial price applicability year 2026.” The list of negotiated drugs for 2026 and their manufacturers was published by the Centers for Medicare & Medicaid Services (CMS) in August 2024.

Sources: BioWorld, BloombergLaw, Law360, Pink Sheet, StatNews, InsideHealth, 340B Report (first, second).

Meanwhile, litigation regarding 340B rebate models, which we discussed in issues No. 46, No. 47, and No. 50 of this digest, continues at the appellate level.

Sources: 340B Report (first, second).

COVERED ENTITY LITIGATION AGAINST MEDICARE ADVANTAGE PLANS CONTINUES

Litigation brought by covered entities and discussed in issue No. 49 of this digest continues. The covered entities allege that Medicare advantage plans inappropriately limited reimbursement for drugs purchased at the 340B price.

Source: Law360.

MANUFACTURER CHALLENGES TO STATE 340B LAWS CONTINUE

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

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

Medicare Part B

No developments to report.

Medicare Part D

No developments to report.

State Law Developments

No developments to report.