Healthcare & Life Sciences: Drug Pricing Digest — Number 59

Inflation Reduction Act, Healthcare Reform, and General Developments

CMS ANNOUNCES VOLUNTARY PAYMENT MODEL TO IMPLEMENT MFN PRICING IN MEDICAID

On November 6, 2025, the Centers for Medicare & Medicaid Services (CMS) issued a press release announcing the voluntary “GENErating cost Reductions fOr U.S. Medicaid (GENEROUS)” payment model, which will implement most favored nation (MFN) pricing in Medicaid. The publication of this payment model came on the same day as the announcement of two further manufacturer pricing deals.

According to the press release, “State Medicaid programs that choose to participate … will be able to purchase drugs included in the pilot at prices aligned with those paid in select other countries.” Further, “Launching in 2026, the model allows CMS to negotiate with participating manufacturers for lower prices, while states adopting the model will implement uniform, transparent coverage criteria.” The model will “run for five years and is voluntary for manufacturers and states.”

The CMS website explains that manufacturers “would report to CMS the international net unit price for the covered outpatient drug and supplemental rebates would be invoiced to manufacturers by states on a quarterly basis, consistent with the calculation of the statutory Medicaid rebates.” The state would bill the manufacturer quarterly for supplemental rebates for the drugs that are subject to the model, and “the supplemental rebate amount would reflect the international pricing for the covered outpatient drug.”

CMS also issued a Request for Applications (RFA) for manufacturers interested in participating in the model. 

Reportedly, an MFN payment model for Medicare is also in preparation. That model is expected to expand Medicare coverage for certain drugs of manufacturers that have entered into pricing agreements with the Trump administration.

Sources: BloombergLaw, InsideHealthPolicy (first, second), The Hill, StatNews (first, second, third), PoliticoPro.

CMS made a revision to the RFA shortly after initially releasing it.

Source: Pink Sheet.

TWO ADDITIONAL MANUFACTURERS ENTER INTO DRUG PRICING AGREEMENTS

Two additional US pharmaceutical manufacturers announced on November 6, 2025, that they have entered into drug pricing agreements with the Trump administration (see here and here). The White House again issued a fact sheet accompanying the announcements. This brings the total number of manufacturers that have entered into such agreements to five. Like the prior agreements, which we discussed in issues No. 56 and No. 57 of this digest, the new agreements remain confidential, and the manufacturers agreed to participate in the TrumpRx website.

Sources: PoliticoPro (first, second, third), StatNews (first, second, third, fourth), Scrip (first, second), InsideHealthPolicy, Pink Sheet, BloombergLaw (first, second), BioWorld (first, second), 340B Report.

Additional manufacturers are reportedly also involved in ongoing negotiations with the Trump administration that may lead to additional agreements. 

Source: Scrip (first, second).

STAKEHOLDERS CONTINUE TO DISCUSS MFN DEAL CONFIDENTIALITY

Commenters again noted that no meaningful details have been disclosed regarding the terms of the agreements that five manufacturers have entered into with the Trump administration.

Source: InsideHealthPolicy.

LEGISLATION TO IMPOSE MFN PRICING REMAINS PENDING

MFN policy discussions and developments have been centered on executive action, either through the deals with manufacturers or through payment models and proposed regulation. Meanwhile, various bills have been introduced in Congress that would impose MFN pricing by law, but their chance of passage remain unclear. 

Source: InsideHealthPolicy.

STAKEHOLDERS DISCUSS INTERNATIONAL MFN IMPACTS

Stakeholders continue to discuss the potential impacts of the MFN drug pricing policy, including on ex-US markets.

Source: BioWorld.

FDA AWARDS SIX ADDITIONAL NATIONAL PRIORITY REVIEW VOUCHERS

On November 6, 2025, coordinated with the announcement of further manufacturer pricing deals, FDA announced six additional awards under the Commissioner’s National Priority Voucher (CNPV) program. As with the first award of vouchers, which we discussed in issue No. 57 of this digest, recipients include manufacturers that have entered into pricing agreements with the Trump administration.

Sources: InsideHealthPolicy, StatNews, Scrip, Bloomberg.

Tune in to the latest episode of the Latham Drug Pricing Podcast, where Washington, D.C. partner Chris Schott and counsel Monica Groat explore the voucher awards in detail and discuss how the accelerated review period might affect launch strategies, whether companies with no voucher will be disadvantaged, and potential risks and concerns.

CMS RELEASES 2026 PHYSICIAN FEE SCHEDULE FINAL RULE 

The 2026 Physician Fee Schedule (PFS) final rule, which CMS released on October 31, 2025, was published in the Federal Register on November 5, 2025. We discussed the PFS proposed rule in issue No. 51 of this digest and the initial release of the PFS final rule in issue No. 58 of this digest.

Among other things, the PFS final rule addresses the interplay between requirements of the Inflation Reduction Act (IRA) and Medicare.

• Part D inflation rebates and 340B units: CMS finalized a claims-based “Prescriber Pharmacy Methodology” to exclude 340B units from Part D inflation rebates beginning January 1, 2026, as required by the IRA, with enhancements to better capture covered entity affiliations (e.g., NPI/MPN mapping and use of OPAIS “Shipping Addresses”). CMS also finalized a voluntary 340B claims data repository to begin collecting submissions in 2026 for potential future use; CMS did not adopt an estimation approach. 
• Part B inflation rebate baseline data: CMS finalized its approach to identify a payment amount benchmark quarter when data are missing by using the third full calendar quarter after assignment of a billing and payment code. If a published payment limit is unavailable for that quarter, CMS calculates the benchmark payment amount for that quarter using positive Average Sales Price (ASP) or Wholesale Acquisition Cost (WAC) figures from the ASP reporting system or, if unavailable, WAC from other public sources. 
• Maximum Fair Price (MFP) and ASP: CMS finalized its approach that units sold at MFP are included in manufacturers’ ASP calculations, effective January 1, 2026.

The PFS final rule addresses other topics as well, including:

• Bona Fide Service Fees (BFSFs): CMS did not finalize the proposed new fair market value (FMV) methodology, reassessment cadence, or third-party valuation requirement and did not finalize a list of fee examples. CMS did finalize new ASP submission requirements: Manufacturers must submit their reasonable assumptions, including their FMV methodology applied in the BFSF analysis (beginning with Q1 2026 submissions, which are due on April 30, 2026), and obtain and report certification letters from recipients of BFSFs confirming that the fee is not passed on. 
• Bundled sale definition: CMS finalized adopting a definition of “bundled arrangement” for purposes of the ASP calculation that largely tracks the long-standing Medicaid definition.

The Hospital Outpatient Prospective Payment System (OPPS) final rule, typically on the same publication schedule as the PFS final rule, has not yet been released.

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

Medicaid Drug Rebate Program (MDRP)

No developments to report.

340B Program

REBATE MODEL IMPLEMENTATION BEGINS

The contractor retained by the Health Resources & Services Administration (HRSA) to administer the 340B rebate model has published the approved implementation plans of the eight manufacturers that are participating in the model. 

Source: 340B Report (first, second).

MANUFACTURER CHALLENGES TO STATE 340B LAWS CONTINUE

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

Sources: BloombergLaw, Law360, 340B Report (first, second, third, fourth, fifth, sixth, seventh, eighth).

Medicare Part B

No developments to report.

Medicare Part D

No developments to report.

State Law Developments

MANUFACTURER CHALLENGE TO COLORADO PDAB LAW CONTINUES

Litigation challenging Colorado’s Prescription Drug Affordability Board (PDAB) statute continues. The Colorado PDAB recently became the first in the nation to impose an upper payment limit (UPL), which we discussed in issue No. 56 of this digest.

Source: BloombergLaw (first, second).

STAKEHOLDERS EXPECT VIRGINIA TO RECONSIDER PDAB BILL

Stakeholders expect that a Virginia law to implement a PDAB, which was vetoed previously, will be reintroduced with a greater chance of passage after Virginia elected a Democratic governor and Democrats control both state chambers.

Source: InsideHealthPolicy.