Welcome to the Week in Review.
Trump’s Executive Order Includes Massive Pharma Giveaway
President Trump’s new executive order (EO) on drug pricing proposes a sweeping change to the Medicare negotiation program that would delay negotiations for small-molecule drugs, typically lower-cost pills, by four years. This delay, which is a major win for drug companies, is outlined in the EPIC Act. If implemented, the policy would shield billions in pharma profits and gut the core of the 2022 prescription drug law’s widely popular cost-saving reforms. According to KFF, more than half of the drugs selected in the first two rounds of negotiation would have been ineligible under this proposal. The policy would have exempted from negotiation some of the most widely used and most expensive drugs covered by Medicare, like Eliquis, Jardiance, and Ozempic, for years longer than under current law, helping pharma to maintain their monopolies for longer at the expense of patients. The industry argues that small-molecule drugs are unfairly subject to negotiation sooner than biologics. But if the Trump Administration truly wants parity, as stated in the EO, it should align both at nine years – not extend monopoly pricing even further. Nine years is already a generous runway before Medicare can negotiate lower prices. The administration is clearly signaling that it sees high drug prices as an urgent issue – but if it’s serious about lowering costs, cutting off one of the most powerful tools in the toolbox is counterintuitive. With fewer high-priced drugs eligible for negotiation, achieving the administration’s stated goal of greater savings for Medicare and patients becomes significantly harder. — (New York Times, Fierce Pharma, The Hill, Healthcare Finance, MedCity News, KFF, Health Affairs, P4ADNow, BioCentury.
Yes, We’re Still Talking About Tariffs
The Trump administration has formally launched a national security investigation into imported pharmaceuticals and drug ingredients – a move that experts warn will raise prices and disrupt supply chains. While Big Pharma could absorb the costs, history shows they’ll pass them on to patients instead. Generics like heparin, which is used daily in hospitals, are especially vulnerable to tariffs due to reliance on raw materials from countries like China. As The Washington Post reports, patients like 66-year-old Wanda, who relies on daily infusions of heparin to survive, could face life-threatening disruptions if tariffs trigger major price hikes or shortages. Health economists warn that the U.S. system isn’t currently equipped to urgently replace global supply chains, and hospitals may be forced to make dangerous tradeoffs. Even as drug companies rush to announce increases in U.S. investment, this policy shift will hit patients long before any promised benefits materialize. As Trump doubles down and drugmakers continue to prioritize profits above all else, it’s patients who will end up paying the price. — (STAT News, POLITICO, Bloomberg, Washington Post, POLITICO, New York Times)
States Push Back on PBM Power Amid National Reform Debate
Momentum is building against the outsized influence of pharmacy benefit managers (PBMs), as 39 state attorneys general called on Congress to ban PBMs from owning pharmacies – a move they say would curb conflicts of interest and reduce drug costs. The plea follows Arkansas enacting the nation’s first law requiring PBMs to choose between operating as middlemen or owning pharmacies, a major step toward dismantling vertically integrated monopolies. Meanwhile, state audits, lawsuits, and a growing patchwork of legislation across the country highlight the urgent need for federal action to rein in PBM abuses and restore fair competition. – (STAT News, U.S. News & World Report, STAT News)
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