Healthcare & Life Sciences: Drug Pricing Digest — Number 63

Inflation Reduction Act, Healthcare Reform, and General Developments 

CMS AGAIN QUIETLY MODIFIES THE GENEROUS RFA

For the second time, the Centers for Medicare & Medicaid Services (CMS) modified the Request for Applications (RFA) document for manufacturers, which sets forth the terms of the “GENErating cost Reductions fOr U.S. Medicaid” (Generous) voluntary Medicaid payment model. We discussed the Generous model in issue No. 59 of this digest.

Among other things, CMS modified the international price reporting timeline and added the following language:

“To ensure that data from the GENEROUS Model can be accurately evaluated and are not affected by potential distortions or confounding variables from overlapping participation in other models, CMS may, at its discretion, waive or modify the applicability of other CMMI Models or Model requirements. Any such waivers shall be provided for in GENEROUS Model [manufacturer Participation Agreements].”

Source: PinkSheet.

IRS PROPOSES CHANGES TO THE BRANDED PRESCRIPTION DRUG FEE

On January 2, 2026, the Internal Revenue Service (IRS) issued a proposed rule that would modify the regulations governing the branded prescription drug fee. The comment period ends on March 3, 2026. The proposed rule “would make updates regarding the discounts, rebates, and other price concessions used to determine branded prescription drug sales under Medicare Part D” in order to address the replacement of the Coverage Gap Discount Program with the new Manufacturer Discount Program. Other statutory changes are also addressed by the proposed rule.

Sources: BloombergLaw, Law360.

Check out our Client Alert that discusses the recently enacted BIOSECURE Act, including how it intersects with manufacturer eligibility for Medicaid and Medicare Part B reimbursement.

IRA LEGAL CHALLENGES CONTINUE

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

Sources: InsideHealthPolicy, Law360, BloombergLaw.

Medicaid Drug Rebate Program (MDRP)

No developments to report.

340B Program

LITIGATION REGARDING THE 340B REBATE MODEL CONTINUES

The US Court of Appeals for the First Circuit has rejected a request by the government to stay the preliminary injunction that was issued by the US District Court for the District of Maine. Thus, the preliminary injunction remains in place, and the implementation of the 340B rebate model remains on hold nationwide. The rebate model was scheduled to commence on January 1, 2026.

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

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.

Source: 340B Report.

MANUFACTURER CHALLENGES TO STATE 340B LAWS CONTINUE

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

Source: 340B Report.

Medicare Part B 

CMS ISSUES FAQS REGARDING NEW BONA FIDE SERVICE FEE REQUIREMENTS

On December 19, 2025, CMS published Frequently Asked Questions regarding the new obligations of manufacturers under Medicare Part B “to submit reasonable assumptions including fair market value (FMV) documentation for current, new, and renewed contracts, and certification from the recipient of a bona fide service fee (BFSF) that the fee is not passed on in whole or in part to a client or customer of an entity.” We discussed the changes to reporting obligations in issue No. 59 of this digest.

Medicare Part D

CMS PUBLISHES IRA REBATE FACT SHEET WITH DRUG LIST

On January 6, 2026, CMS published a fact sheet regarding the initial rebate periods under the IRA: October 1, 2022, through September 30, 2023, and October 1, 2023, through September 30, 2024. The fact sheet lists the drugs that triggered the rebate and shows the rebate amount for each drug.

State Law Developments

No developments to report.