Healthcare & Life Sciences: Drug Pricing Digest — Number 55

Inflation Reduction Act, Healthcare Reform, and General Developments

PRESIDENTIAL MEMORANDUM CRITICIZES PRESCRIPTION DRUG ADVERTISING

On September 9, 2025, the White House published a memorandum titled “Memorandum for the Secretary of Health and Human Services the Commissioner of Food and Drugs.” The memorandum criticizes advertisements for prescription drugs directed at consumers, stating that “FDA’s requirements have permitted drug companies to include less information, particularly in broadcast advertising, and drug manufacturer advertising has skyrocketed in recent decades.” 

In response, the Trump administration “will ensure that the current regulatory framework for drug advertising results in fair, balanced, and complete information for American consumers.” To that end, the memorandum directs the Secretary of Health and Human Services to “take appropriate action to ensure transparency and accuracy in direct-to-consumer prescription drug advertising, including by increasing the amount of information regarding any risks associated with the use of any such prescription drug.” The FDA appears to have started implementing the policy, reportedly sending cease-and-desist letters to 100 companies.

The negative view of direct-to-consumer (DTC) advertising appears incongruent with the Trump administration’s prior promotion of DTC distribution models.

Sources: BloombergLaw, InsideHealthPolicy (first, second), StatNews.

IRA POLICY DISCUSSIONS AND LEGAL CHALLENGES CONTINUE

On September 4, 2025, Health and Human Services (HHS) Secretary Robert F. Kennedy Jr. said during a Senate Finance Committee hearing that the Inflation Reduction Act (IRA) drug pricing negotiations were “very well intentioned, but they were poorly structured.” He claimed that the negotiations had increased the cost for government, while Senator Catherine Cortez Masto (D-Nev.) cited Congressional Budget Office (CBO) findings that the negotiation program would result in approximately $100 billion in savings over the next 10 years.

Sources: BloombergLaw, PinkSheet.

Drug manufacturer litigation against the IRA drug pricing negotiation program continues, with the US Court of Appeals for the Third Circuit rejecting arguments that the program infringes on manufacturers’ constitutional rights.

Sources: Law360, BloombergLaw.

Medicaid Drug Rebate Program (MDRP)

No developments to report.

340B Program

CBO ISSUES REPORT ON 340B DRUG PRICING PROGRAM GROWTH

On September 9, 2025, the CBO issued a report titled “Growth in the 340B Drug Pricing Program.” Among other things, the CBO found that “[in] 2021, health care facilities that participated in the [Prime Vendor Program, which includes about 90% of covered entities] spent $43.9 billion on drugs purchased through the 340B program, up from $6.6 billion in 2010 (adjusted to 2021 dollars).” Beyond market-wide growth in drug spending, the CBO attributes the increased 340B spending to “the integration of hospitals and off-site clinics, increased facility participation after the implementation of the Affordable Care Act, and expanded use of off-site pharmacies.”

The report concludes that in the CBO’s assessment, “the 340B program encourages behaviors—including the prescription of more and higher-priced drugs, the expansion of services, and the integration of hospitals and off-site clinics—that tend to increase federal spending.”

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

COVERED ENTITY CHALLENGES TO MANUFACTURER AUDIT CONTINUES

As reported in issue No. 49 of this digest, multiple covered entities filed litigation seeking to halt audits initiated by a manufacturer. Following the case’s dismissal in June, the covered entities have now filed an emergency appeal.

Source: 340B Report.

REBATE MODEL DISCUSSIONS CONTINUE

Stakeholders continue to discuss the proposed 340B rebate model guidance, which we covered in issue No. 52 of this digest. Reportedly, more than 1,200 comments were submitted on the draft guidance.

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

MANUFACTURER CHALLENGES TO STATE 340B LAWS CONTINUE

Drug manufacturer litigation challenging the 340B laws enacted by various states continues.

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

Medicare Part B

GAO REPORT EXAMINES MEDICARE NATIONAL COVERAGE DETERMINATIONS

On September 9, 2025, the Government Accountability Office (GAO) issued a report titled “Medicare: National Coverage Determinations Are Generally Timely, but Improvements Are Needed.” GAO recommends that the Centers for Medicare & Medicaid Services (CMS) “identify the causes of national coverage determination delays to better ensure that analyses are finalized within specified time frames” and “make available to the public the criteria it uses to prioritize its coverage analyses.” According to the report, HHS “concurred with our recommendations.”

Source: BioWorld.

Medicare Part D

No developments to report.

State Law Developments

No developments to report.