President Donald Trump is unlikely to fully dismantle the Medicare drug price negotiation process established under the Inflation Reduction Act (IRA), despite his efforts to reverse other Biden-era policies. Instead, he is expected to make modifications to the program, which may not require congressional approval. Trump could either ease the negotiations in a manner favorable to the pharmaceutical industry, or push for greater savings for patients and the federal government.
Frier Levitt partners Matthew Kupferberg and Jesse Dresser discuss this topic in a CNBC article, “Trump Is Unlikely to End Medicare Drug Price Talks — Here’s What That Means for Patients and Pharma.”
Jesse emphasizes that there isn’t the same level of bipartisan support for changes to the IRA as there is for PBM reform, stating, “I could see something like [PBM reform] happening a lot sooner than I could see trying to open up the IRA and tweak it, even if it’s something that the administration might ultimately get behind.” Matthew suggests that, “Trump is looking to nibble around the edges of the law” and that the president is “not looking to completely abandon the drug negotiation process at this point.” He highlights that this would place Trump in the position of needing to propose a replacement for Medicare drug price negotiations, which we haven’t seen from him yet.
Still, the Trump administration has been vague about its stance on the negotiations, stating only in January that it aims to bring “greater transparency” to the ongoing second cycle and will consider feedback from external stakeholders on how to improve the process. Importantly, the direction Trump takes could have significant implications for the medication costs of 68 million Medicare beneficiaries in the U.S. It will also affect companies like Novo Nordisk, Bristol Myers Squibb, Pfizer, and Merck, whose drugs were part of the first two rounds of negotiations.