Trump may change Medicare drug price negotiations

President Donald Trump may not abolish the groundbreaking process that will allow Medicare to negotiate drug prices with manufacturers, even if he moves to erase the achievements of other historic policies of Joe Biden It has sex.

But Trump is likely to make some changes to these price associations and may not need help from Congress.

“Trump wants to nibble at the edge of the law,” said Matthew Kupferberg, partner at Free Levitt’s Life Sciences Group.

However, it is still unclear which direction Trump will tilt. Some lawmakers and health policy experts said Trump could undermine negotiations in ways that help the pharmaceutical industry, but others said he would give patients and federal government more money He said he could try to save him.

The path he took allowed the US 68 million Medicare beneficiaries to have a great interest due to the price they pay for their medicine. It also has a major impact on companies like this Novo Nordisk, Bristol Myers Squibb, Pfizer and Merckamong other things, drugs were included in the first two rounds of talks.

The negotiations are a key provision in Biden’s Inflation Reduction Act (IRA), which aims to reduce prescription drug costs for older people and save nearly $100 billion on Medicare spending over the next decade. The pharmaceutical industry is vehemently opposed price talks, claiming amid a gust of lawsuits that threaten profits and thwart drug innovation.

What does the Trump administration aim to “more transparency” in the ongoing second cycle of the process in January, and to hear ideas from outside stakeholders to improve it? Separately, it provides little details about its approach to negotiation.

It would be a difficult battle to make major changes to the law or completely abolish it, as Republicans need help from Congress, where they hold a slim majority. Lowering high healthcare costs have received strong bipartisan support in countries where patients pay more than 2-3 times more prescription drugs than people in other developed countries, which is potentially unpopular for Trump. It’s moving in a way.

Therefore, the Trump administration will implement regulations in a different way than Biden, including changing how the government interprets drug law selection criteria, among other potential changes. I was able to move like that.

“I think it’s the question of how they interpret some of the legal language,” says Juliet Cubanski, deputy director of the program on Medicare policy at the health policy organization KFF.

Cubanski said it will be the first glimpse into the changes in the coming months.

The Trump administration will begin a months-long negotiation process for the second cycle of 15 drugs, with new prices in 2027. The Biden administration chose those drugs in January when Trump took office. Drugmakers will need to decide whether to participate in consultations until the end of February.

Trump has so far only indicated the need for transparency in Medicare drug price negotiations. Kupferberg said that could mean disclosure of more information on government rationales for selecting drugs and determining prices.

In the first round of consultations, Medicare provided open opportunities for patients, caregivers and consumer groups. But Kupferberg said the Trump administration can bring in other stakeholders beyond manufacturers and patients, including intermediaries known as insurance companies and pharmacy benefits managers.

“It could be a much broader type of negotiation process,” he said.

The administration can also reinterpret the guidelines of the law, according to Amy Campbell, associate dean of law and health sciences at the University of Illinois Chicago Law School.

For example, the IRA says that the drug chosen for negotiation must have been on the market for at least seven years without a typical competitor, or for 11 years in the case of biological products such as vaccines. . However, when choosing another drug, the Trump administration may have a “slow standard” to determine whether drugs are competing in the market and should be exempt from negotiated prices. Campbell said.

Trump could also correct Medicare’s consideration of one drug for negotiation purposes, KFF’s Cubanski said. Currently, a wide variety of products that share the same active ingredient can be selected as a single product. This is opposed by the pharmaceutical industry.

For example, the Biden administration included three products of three Novo Nordisk branded drugs with the same active ingredient, semaglutide, one of the products in the second cycle of price negotiations. These include weight loss pills, Wegovy, the diabetic tablet Rybelsus, and anti-obesity injection ozempic. Of the three, Ozempic is the majority of Medicare spending.

Any of these changes to how Medicare selects drugs can benefit drugmakers and reduce lost revenue at low prices.

The bigger question is how aggressively Medicare will negotiate prices under Trump, Cubanski said. Currently, the final negotiated price of a drug cannot exceed the upper limit or “ceiling” price established by the IRA.

Trump could affect whether the initial price offer for Medicare for drugs is close to ceiling prices, which could reduce his ability to secure deeper discounts on the program.

They need help from Congress, so major changes in price negotiations are much less likely to occur. For example, one of the pharmaceutical industry’s biggest problems with processes is what drugmakers call “pill penalties.”

The law essentially sparsed vaccine-like biology from new negotiated prices for 13 years after receiving US approval compared to just nine years of small molecule drugs that come in the form of pills or tablets. Not there. The industry argues that the contradiction prevents businesses from investing in developing small molecule drugs that are more convenient for patients.

Cubanski said last year there was a bipartisan law that proposed eliminating tablet penalties. If that bill does it through Congress and through Trump’s desk, “I don’t know why he doesn’t sign it,” Cubanski said.

She added that interest appears to be growing in legislative changes to the negotiation program, but “whether or not they will gain sufficient support in Congress is still a truly open question.”

Jesse Dresser, partner in Frier Levitt’s life sciences, says that there is no level of bipartisan support for IRA changes, just like efforts like pharmacy benefits manager reform.

“Even if the administration may be behind in the end, we were able to see (PBM reform) happening much earlier than we were trying to open up the IRA and try to fine-tune it,” Dresser said. said.

It is unclear how Trump will approach the ongoing legal battle between makers and the federal government over the Medicare program.

The legal challenges in the pharmaceutical industry, which argue that consultations are unconstitutional and should be stopped, have so far failed in court. As of January, nine lawsuits were ongoing.

“Will the Trump administration continue to defend the program or not actively defend the program?” Cubanski said. “I think these are some important questions.”

If the Trump administration halts defending the program in court, judges can make decisions on the matter without objection, Kupferberg said. However, he said he doesn’t think the administration wants that outcome.

The Trump administration probably wants to “control that process, where the parties will take the agreement or modify or change the interpretation of the law,” Kupferberg said.

He added that Trump does not seem to want to destroy the entire negotiation program based on the lawsuit. That’s because Trump is in a position to come up with an alternative to Medicare drug price negotiations, and from him “I haven’t seen it yet,” Kupferberg said.