Medicare Drug Price Negotiations Again Target High-Impact Prescriptions, But at what Cost?

By: Marcus J. Hopkins, Health Policy Lead Consultant, ADAP Advocacy

The Trump Administration recently released the next round of medications selected for the Medicare Drug Price Negotiation Program, which includes 15 medications payable under Medicare Part B and/or covered under Medicare Part D, largely for the treatment of chronic diseases and cancer.

Photo Source: CMS

Of greatest concern to ADAP Advocacy is the inclusion of Biktarvy, the most commonly prescribed single-pill oral regimen to treat HIV made by Gilead Sciences, currently taken by over 430,000 people living with HIV in the United States (Gilead Sciences, 2026), or 35.8% of People Living With HIV/AIDS (PLWHA).

In June 2025, ADAP Advocacy submitted public comment to the Centers for Medicare and Medicaid Services (CMS). In this public comment, it requested that CMS create a carve-out exemption for all medications used for the treatment of HIV/AIDS in order to avoid any interruptions of service for PLWHA who rely upon Medicare for their HIV medications.

ADAP Advocacy followed up on this public comment with a sign-on letter to CMS requesting the carve-out exemption, which garnered signatures from nearly 40 organizations and received a direct response from Dr. Mehmet Oz, the current CMS Administrator.

The response?

"CMS acknowledges your recommendation to implement a carve-out exemption for all medications indicated for the treatment and prevention of HIV/AIDS; however, the statute does not specify a specific exclusion for medications used for the treatment of HIV/AIDS from selection under the Negotiation Program."

Essentially, “Sorry. Can’t help you.”

Photo Source: ADAP Advocacy

What Does Price Negotiation Mean?

As ADAP Advocacy detailed in a July 2025 blog, Medicare’s Negotiation Program essentially requires manufacturers to accept the final price after four negotiation meetings set by CMS, reject the offer, and pay a 95% excise tax on all of the medications sold to Medicare payors, or remove their products from the Medicare formularies altogether (Hammond, 2024). Because no business can feasibly accept a 95% excise tax and remain viable, manufacturers are left with the unenviable decision to either accept significant profit losses in the Medicare market or withdraw their drugs (Hopkins, 2025). This process, which is supposed to resemble a negotiation, has been characterized by many as a threat with the full force of the federal government behind it. One public health stakeholder attending ADAP Advocacy’s Health Fireside Chat last year in Minneapolis, Minnesota, called it extortion. 

For PLWHA, the inclusion of one of the most effective single-pill regimens in the history of HIV treatment on this list presents a real and present danger should Gilead Sciences determine that allowing Biktarvy to be purchased at a significant loss by Medicare payors is unacceptable.

Medicare is the 2nd-largest payor of HIV treatment and care in the United States, accounting for 39% of federal spending in 2020, and serving 28% of PLWHA (Dawson, et al., 2023).

Patient advocates continue to share their concerns over Biktarvy, or any other HIV-related product, being targeted by CMS for artificial government price controls. Among them is Aging and HIV Institute’s David “Jax” Kelly, JD, MPH, MBA. Kelly argued, “Nearly 28% of PLWH in the United States are Medicare beneficiaries, and most qualified through disability rather than age… [t]his unique cost profile reflects both the effectiveness and the financial burden of HIV treatment. Interruptions in ART jeopardize not only individual health but also public health goals. Sustained viral suppression—essential to ending the epidemic—depends on reliable, affordable access to medications.”

ADAP Advocacy will follow up with its aforementioned communications with CMS by submitting public comments in response to its request for information about selected drugs and their therapeutic alternatives, because the inclusion of an antiretroviral therapeutic “is playing with fire,” as ADAP Advocacy’s CEO has noted on numerous occasions.

Photo Source: Andreas Marquardt/Shutterstock

What Can Patients Do?

Please find information below on how you can get involved:

[From CMS]:

The Negotiation Program enables Medicare to directly negotiate the prices of certain high-cost drugs. The current cycle of negotiation and renegotiation is underway, and CMS wants to hear directly from patients, caregivers, clinicians, and others to gather input relevant to the selected drugs.

CMS invites you to rally the communities you represent to share information about the public engagement events, including a virtual livestreamed town hall meeting focused on the clinical considerations related to the selected drugs, and private (i.e., not livestreamed or open to press or general public) virtual patient-focused roundtable events, one for each selected drug, for patients, patient advocacy organizations, and caregivers.  

Take Action

• Learn more about the drugs selected for the current cycle of negotiation and renegotiation here.
• Use communication tools available here so that your organization can leverage your various communication channels to share information about these opportunities:
• Complete the Drug Price Negotiation Information Collection Request (ICR).
• Register for public engagement events here. 

Key Dates

• The Drug Price Negotiation ICR is now available, and responses are due by March 1, 2026. It is worth noting that for patients wanting to submit public comments, questions 28-33 are the patient- or caregiver-focused input (so don’t get overwhelmed by the length of the online form)
• Drugs selected for the upcoming cycle of negotiation and renegotiation were announced on January 27, 2026, and registration for the public engagement events is open now until March 6, 2026.
• Public engagement events for Biktarvy include:
• Roundtable event on Monday, April 6 from 2:30 – 4:30 p.m. ET 
• Town Hall Meeting on Wednesday, April 22, Session 1 from 10:30 a.m. – 12 p.m. ET

Photo Source: Portland.gov 

Registration for the opportunity to speak at the public engagement events is now open and will close at 11:59 p.m. PT on March 6, 2026.

• To register for a roundtable event, click here. 
• To register for the town hall meeting, click here. 

Reach out to IRARebateandNegotiation@cms.hhs.gov with any questions, using the subject line “Public Engagement.”

ADAP Advocacy urges patients and patient advocates to weigh in. While financial outlays may be high for PLWHA due to treatment costs, the financial impacts of treatment interruption are far higher. While treatment cessation for any disease state can cause serious complications, the nature of the HIV retrovirus is such that it can quickly mutate to develop resistance to a treatment regimen if that regimen is suddenly halted. This can create a strain of HIV that is multidrug-resistant (MDR-HIV), making the virus more difficult and significantly costlier to treat–and result in premature death. CMS targeting an HIV-related therapeutic signals a threat to AIDS exceptionalism, and it cannot be left to chance.

Disclaimer: Guest blogs do not necessarily reflect the views of the ADAP Advocacy Association, but rather they provide a neutral platform whereby the author serves to promote open, honest discussion about public health-related issues and updates.

References:

[1] Centers for Medicare and Medicaid Services. (2026, January). Medicare Drug Price Negotiation Program: Selected Drugs for Initial Price Applicability Year 2028. Washington, DS: United States Department of Health and Human Services: Centers for Medicare and Medicaid Services. https://www.cms.gov/files/document/factsheet-medicare-negotiation-selected-drug-list-ipay-2028.pdf

[2] Dawson, L., Kates, J., Roberts, T., Cubanski, J., Neuman, T., & Damico, A. (2023, May 27). Medicare and People with HIV. KFF: HIV/AIDS. https://www.kff.org/hivaids/issue-brief/medicare-and-people-with-hiv/

[3] Gilead Sciences. (2026). Biktarvy. Foster City, CA: Gilead Sciences: Biktarvy: About Biktarvy. https://www.biktarvy.com/about-biktarvy

[4] Hammon, J. (2024, August 19). Price controls – bad policy, big problems. Washington, DC: Paragon Health Institute. https://paragoninstitute.org/paragon-prognosis/price-controls-bad-policy-big-problems/

[5] Hopkins, M. J. (2025, July 10). CALL TO ACTION: HIV Medication Carve-Out Exemption from the Medicare Drug Price Negotiation Program. Nags Head, NC: ADAP Advocacy: ADAP Blog. https://adapadvocacyassociation.blogspot.com/2025/07/call-to-action-hiv-medication-carve-out.html

Trump Administration Applauds Itself for Rx Access Agreements, But Will They Help Patients?

By: Marcus J. Hopkins, Health Policy Lead Consultant, ADAP Advocacy

In May 2025, President Donald J. Trump signed an executive order requiring, among other things, that pharmaceutical companies lower the prices of certain drugs to align with those charged in other comparably developed nations (e.g., most of Europe; Simons & Hopkins, 2025). Those companies that failed to comply with this order would be subject to administrative retaliation that imposes what the Trump Administration is calling “Most-Favored Nation” (MFN) pricing.

Photo Source: The White House

ADAP Advocacy covered this executive order last May, bringing several questions to the fore:

1. How will the U.S. Department of Health and Human Services (HHS) determine what the MFN price is for medications?
2. Which classes of medications and how many will be included in this pricing scheme?
3. Will these pricing agreements apply only to drugs purchased through public insurance programs, such as Medicaid, Medicare, and the Veterans Affairs (VA), or will these pricing agreements apply to drugs purchased using commercial insurance? (Franco, 2025)

In 2026, the Trump Administration’s "negotiations-at-gunpoint" approach has borne some fruit. The Trump Administration released a fact sheet late last year indicating that pricing and manufacturing agreements had been reached with 9 drug manufacturers (The White House, 2025). The details are available in the list below, which outlines each manufacturer’s agreement.

As with the executive order itself, the majority of the details of each manufacturer’s agreement with the Trump Administration are proprietary. What is striking about many of these deals is that the drugs sold direct-to-consumer are already off-patent, have cheaper biosimilars, or are no longer actively prescribed.

The latter is true for many of the medications used to treat HIV that will sold directly to patients, including Reyataz (Briston Myers Squibb; atazanavir), an oral protease inhibitor medication that was commonly used in combination with other medications, including Norvir (ritonavir; used to slow down the breakdown of Reyataz) and a nucleoside/nucleotide reverse transcriptase inhibitor (NRTI), such as Truvada (emtricitabine/tenofovir disoproxil fumarate).

Other drugs, such as Humira (Amgen), have multiple biosimilar options available at lower prices than Amgen's direct-to-patient pricing. Of greater concern is the possibility that these lower prices are merely stopgap measures that will remain in place only as long as the Trump Administration remains in office.

Photo Source: Houston Public Media | Win McNamee | Getty Images

While the optics of lower drug prices through forced “voluntary” negotiations look great on paper, most of these agreements come with three-year exemptions from tariffs imposed by the Trump Administration, which are currently facing a pending Supreme Court ruling on the legality of those tariffs under the International Emergency Economic Powers Act (IEEPA; Chung, 2026).

Should those tariffs be overturned by the Supreme Court or by a future president, drug manufacturers will have little incentive to honor many of the provisions of their respective deals, particularly U.S.-based manufacturing and research and development investments.

Further still, the opacity of these agreements, as well as HHS's determination of what “MFN” pricing is for individual drugs, means there remains little transparency into the drug pricing process. What’s to stop manufacturers from drastically increasing list prices to offset the “discounts” offered (Buntz, 2026)?

Finally, how many Americans will actually be able to access and afford these medications hinges on whether they have public (e.g., Medicaid, Medicare, VA) or commercial insurance (e.g., employer-sponsored, marketplace). While each manufacturer was voluntarily forced to sell medications on TrumpRx.gov, there is still no “TrumpRx”—the website is a placeholder site that promises “the lowest prescription drug prices in America,” but no details or actual drugs are listed. Instead, visitors are “graced” with a scowling (and AI-edited) photo of the president.

Photo Source: TrumpRx

The reality, here, is that Trump’s increasingly unpopular brand, as well as his long-documented failures to make good on the vast majority of his promises, are likely to drive away consumers, rather than convincing them to put their faith in anything with his name on it. But that’s the way of the day in our Trumpian dystopia: a power-hungry madman obsessed with branding everything with his name, like some heifer at the O.K. Corral.

In the short term, state Medicaid programs are the likeliest to benefit, as nearly every manufacturer has agreed to sell their medications to those programs at prices comparable to other developed nations (Lim, 2026). That will save states money, but most Medicaid patients already pay very low prices for most medications, meaning that the savings here are mostly to state governments rather than patients.

For direct-to-patient purchasing, while many patients may choose this route rather than enrolling in commercial insurance, for those who receive federal subsidies to offset monthly premiums, the complexity and secrecy of the U.S. healthcare system make it virtually impossible to determine whether patients will actually save money by skipping the middlemen.

ADAP Advocacy will continue to monitor MFN pricing and how that might impact people living with HIV/AIDS.

Drug Manufacturer MFN Agreement Outlines:

• Amgen
• Amgen will expand its direct-to-patient program, AmgenNow™, to include Aimovig® (migraine treatment) and Amjevita® (biosimilar to Humira to treat autoimmune conditions), at a discounted monthly price of $299. This expands the available drugs, which also includes Repatha® (cholesterol-lowering medication) at a monthly price of $239 (Amgen, 2025).
• Bristol Myers Squibb (BMS)
• BMS agreed to make Eliquis® (blood thinning medication) available to Medicare for free starting January 1st, 2026.
• Agreed to donate 7 tons of Eliquis to fill the U.S. Strategic Active Pharmaceutical Ingredient Reserve (SAPIR).
• Agreed to launch new medications with “…a more balanced pricing approach across developed nations”.
• Agreed to enable direct-to-patient access for cash-paying patients for Sotyktu® (plaque psoriasis), Zeposia® (relapsing multiple sclerosis and ulcerative colitis), Reyataz® (HIV), Baraclude® (Hepatitis B), Orencia® SC (autoimmune conditions).
• Each of these drugs will be sold at approximately 80% off the current list price through TrumpRx.gov (BMS, 2025).
• Boehringer Ingelheim
• Boehringer will offer medications directly to consumers through TrumpRx.gov
• Will sell Jentadueto (Type-2 Diabetes) for $55.
• Will invest $10 billion through 2028 to expand pharmaceutical research and development (R&D) and manufacturing operations in the U.S.
• Includes $1b specifically earmarked for capital expenditures (Boehringer Ingelheim, 2025).
• Genentech
• Genentech will provide medications to state Medicaid programs at prices comparable to other developed nations.
• Will allow certain drugs, including Xofluza (inflluenza) through TrumpRx.gov and through its recently established direct-to-patient program.
• Commits to increasing U.S. manufacturing, infrastructure, and R&D (Genentech, 2025).
• Gilead Sciences
• Gilead will offer discounts on certain existing medications, including those used to treat HIV, Hepatitis C, Hepatitis B, and COVID-19, for state Medicaid programs.
• Agreed to price future medications “…at parity” with other key developed nations.
• Will launch a direct-to-patient program for Epclusa® (Hepatitis C) at a discounted cash price that can be accessed through TrumpRx.gov (Gilead Sciences, 2025).
• GSK (formerly GlaxoSmithKline) / ViiV
• GSK will lower the prices of certain medications to state Medicaid programs, including most of its respiratory drug portfolio.
• GSK will also make most of its inhaled medications and other products available through a direct-to-patient program (TrumpRx.gov) at savings up to 66%.
• Will provide SAPIR with a reserve of albuterol (active ingredient in many inhalers used to treat asthma and chronic obstructive pulmonary disorder [COPD]; GSK, 2025).
• Merck
• Merck will provide direct-to-patient access to Januvia (Type-2 Diabetes), Janumet (Type-2 Diabetes), and Janumet XR through TrumpRx.gov.
• This will be expanded to include enlicitide decanoate, an investigational drug currently being developed to lower cholesterol, once it has received approval from the U.S. Food and Drug Administration (FDA; Merck, 2025).
• Novartis
• Novartis agreed to launch future medications at prices comparable with other developed nations.
• Will build direct-to-patient platforms for Mayzent (multiple sclerosis), Rydapt (acute myeloid leukemia and rare blood disorders), and Tabrecta (metastatic non-small cell lung cancer) through TrumpRx.gov.
• Will apply to participate in the GENEROUS (GENErating cost Reductions fOr U.S. Medicaid) model announced by the Trump Administration in November 2025 (HHS, 2025) aimed at improving access to medications through state Medicaid programs.
• Will support efforts to “…address the global imbalance in investment in pharmaceutical innovation” (Novartis, 2025).
• Sanofi
• Sanofi agreed to ensure that state Medicaid programs can access Sanofi medications at the same prices as other developed nations.
• Will reduce prices by an average of 61% for certain medications used to treat diabetes, cardiovascular and neurological conditions, and cancer.
• Will offer direct-to-patient access for certain drugs through TrumpRx.gov.
• Will implement a “…more balanced approach” on pricing in other nations.
• Agreed to increase investments in upgrading existing manufacturing facilities and expand manufacturing partnerships (Sanofi, 2025).

In addition to these companies, the Administration has entered into pricing and manufacturing agreements with:

• AbbVie
• AbbVie agreed to spending $100 billion in U.S. R&D and other capital investments over the next decade.
• Will provide “low prices” to state Medicaid programs.
• Will provide direct-to-consumer access to Humira (rheumatoid arthritis), Alphagan (glaucoma or ocular hypertension), Combigan (glaucoma or ocular hypertension), and Synthroid (hyperthyroidism) through TrumpRx.gov (Fidler, 2026).
• AstraZeneca
• AstraZeneca will provide direct-to-consumer sales to eligible patients with chronic diseases at a discount of up to 80% off list prices through TrumpRx.gov.
• Will invest $50 billion in manufacturing and R&D through 2030, 50% of which is expected to be generated in the U.S. (AstraZeneca, 2025).
• .ohnson & Johnson (J&J)
• J&J will provide direct-to-patient access through TrumpRx.gov.
• Will “…[enable] American patients to access medicines at comparable prices to other developed countries”.
• Will provide state Medicaid programs with access to medications at prices comparable to other developed nations.
• Announced two new U.S. manufacturing facilities in Pennsylvania and North Carolina (J&J, 2026).
• Eli Lilly
• Eli Lilly and Company will provide Medicare beneficiaries with Zepbound (weight management GLP-1 medication) and orforglipron, an investigational oral GLP-1 drug awaiting FDA approval, for no more than $50/month.
• State Medicaid programs will also be able to access these medications at reduced prices (prices not stated).
• Will enable self-paying (cash-paying) patients to access Zepbound at its lowest dose for $299, with additional doses up to $449 through direct-to-patient access, representing a $50 savings.
• Patients refilling their multi-dose pens will pay no more than $449.
• Will provide direct-to-patient orforglipron at the lowest dose for $149, with additional doses up to $399.
• Nota bene – the scope of this agreement DOES NOT include commercial pricing.
• Will add Emgality (migraines and cluster headaches), Trulicity (Type-2 Diabetes), and Mounjaro (specific to Type-2 Diabetes) to direct-to-patient channels at 50-60% off current list prices.
• Will continue to offer insulin to patients for no more than $35/month, whether a patient is commercially insured or uninsured (Eli Lilly, 2025).
• Pfizer
• Pfizer agreed to implement measures to ensure Americans receive “…comparable drug prices to those available in other developed countries,” and will price new medications at parity with other developed markets.
• Will participate in direct-to-patient sales through TrumpRx.gov, allowing Americans to purchase primary care treatments and specialty drugs at an average discount of 50% and at discounts of up to 85%.
• Committed to investing an additional $70 billion in the U.S. for R&D and capital projects over the next few years (Pfizer, 2025).

Disclaimer: Guest blogs do not necessarily reflect the views of the ADAP Advocacy Association, but rather they provide a neutral platform whereby the author serves to promote open, honest discussion about public health-related issues and updates.

References:

[1] Amgen. (2025, December 19). Amgen takes action with the U.S. government to lower the cost of medicines for American patients. Thousand Oaks, CA: Amgen: Newsroom: Press Releases. https://www.amgen.com/newsroom/press-releases/2025/12/amgen-takes-action-with-the-u-s--government-to-lower-the-cost-of-medicines-for-american-patients

[2] AstraZeneca. (2025, October 10). AstraZeneca announces historic agreement with US Government to lower the cost of medicines for American patients. Cambridge, UK: AstraZeneca: Media Centre: Press Releases. https://www.astrazeneca.com/media-centre/press-releases/2025/astrazeneca-announces-historic-agreement-with-us-government-to-lower-the-cost-of-medicines-for-american-patients.html

[3] Boehringer Ingelheim. (2025, December 19). Boehringer Ingelheim announces broad agreement with the U.S. Government to lower the cost of medicines for American patients and expand its U.S. footprint. Ridgefield, CT: Boehringer Ingelheim: US: Media: Press Releases. https://www.boehringer-ingelheim.com/us/media/press-releases/boehringer-ingelheim-announces-agreement-us-government

[4] Bristol Myers Squibb. (2025, December 19). Bristol Myers Squibb Announces Agreement with U.S. Government to Improve Affordability and Access to Critical Medicines for Americans. Princeton, NJ: Bristol Myers Squibb: News: Corporate/Financial News. https://news.bms.com/news/corporate-financial/2025/Bristol-Myers-Squibb-Announces-Agreement-with-U-S--Government-to-Improve-Affordability-and-Access-to-Critical-Medicines-for-Americans/default.aspx

[5] Buntz, B. (2026, January 02). Drug companies sign “Most Favored Nation” deals, then raise prices anyway. Cleveland, OH: WTWH Media LLC: Drug Discovery & Development. https://www.drugdiscoverytrends.com/drug-companies-sign-most-favored-nation-deals-then-raise-prices-anyway/

[6] Chung, A. (2026, January 09). Supreme Court plans rulings for January 14 as Trump's tariffs remain undecided. London, UK: Reuters: Legal: Government. https://www.reuters.com/legal/government/supreme-court-set-issue-rulings-trump-awaits-fate-tariffs-2026-01-09/

[7] Eli Lilly and Company. (2025, November 06). Lilly and U.S. government agree to expand access to obesity medicines to millions of Americans. Indianapolis, IN: Eli Lilly and Company: News Releases. News Release Details. https://investor.lilly.com/news-releases/news-release-details/lilly-and-us-government-agree-expand-access-obesity-medicines

[8] Fidler, B. (2026, January 13). AbbVie pledges $100B to US production in drug pricing deal with Trump. Newton, MA: Industry Dive: Biopharma Dive: News. https://www.biopharmadive.com/news/abbvie-drug-price-deal-trump-most-favored-nation/809441/

[9] Franco, M. A. (2025, May 14). Trump Administration Revives Most-Favored-Nation Drug Pricing: Here's What to Know. Holland & Knight: Insights. Retrieved from https://www.hklaw.com/en/insights/publications/2025/05/trump-administration-revives-most-favored-nation-drug-pricing

[10] Genentech. (2025, December 19). Genentech Announces Agreement With U.S. Government. South San Francisco, CA: Genentech: Media: Press Releases. https://www.gene.com/media/press-releases/15094/2025-12-19/genentech-announces-agreement-with-us-go

[11] Gilead Sciences. (2025, December 19). Gilead and U.S. Government Enter Agreement to Lower Costs of Medicines for Americans. Foster City, CA: Gilead Sciences: News: News Releases. https://www.gilead.com/news/news-details/2025/gilead-and-u-s--government-enter-agreement-to-lower-costs-of-medicines-for-americans

[12] GSK. (2025, December 19). GSK enters agreement with U.S. government to lower drug prices and expand access to respiratory medicines for millions of Americans. London, UK: GSK: Media: Press Release Archive. https://www.gsk.com/en-gb/media/press-releases/gsk-enters-agreement-with-us-government-to-lower-drug-prices-and-expand-access-to-respiratory-medicines-for-millions-of-americans/

[13] Johnson & Johnson. (2026, January 08). Johnson & Johnson Reaches Agreement with U.S. Government to Improve Access to Medicines and Lower Costs for Millions of Americans; Delivers on U.S. Manufacturing and Innovation Investments. New Brunswick, NJ: Johnson & Johnson: Media Center: Press Releases. https://www.jnj.com/media-center/press-releases/johnson-johnson-reaches-agreement-with-u-s-government-to-improve-access-to-medicines-and-lower-costs-for-millions-of-americans-delivers-on-u-s-manufacturing-and-innovation-investments

[14] Lim, D. (2026, January 04). Trump’s drug-pricing deals won’t benefit most Americans today. They could over time. Politico: News. https://www.politico.com/news/2026/01/04/trumps-drug-pricing-deals-wont-benefit-most-americans-today-that-could-over-time-00706529?cid=Connatix

[15] Merck. (2025, December 19). Merck Reaches Agreement With U.S. Government to Expand Access to Medicines and Lower Costs for Americans. Rahway, NJ: Merck: Media: News Releases. https://www.merck.com/news/merck-reaches-agreement-with-u-s-government-to-expand-access-to-medicines-and-lower-costs-for-americans/

[16] Novartis. (2025, December 19). Novartis and US government reach agreement on lowering drug prices in the US. Basel, CH: News. https://www.novartis.com/news/media-releases/novartis-and-us-government-reach-agreement-lowering-drug-prices-us

[17] Pfizer. (2025, September 30). Pfizer Reaches Landmark Agreement with U.S. Government to Lower Drug Costs for American Patients. New York, NY: News: Press Release. Press Release Details. https://www.pfizer.com/news/press-release/press-release-detail/pfizer-reaches-landmark-agreement-us-government-lower-drug

[18] Sanofi. (2025, December 19). Press Release: Sanofi reaches agreement with the US government to lower medicine costs while strengthening innovation. Paris, FR: Sanofi: English: Media Room: Press Releases. https://www.sanofi.com/en/media-room/press-releases/2025/2025-12-19-19-21-43-3208697

[19] Simons, R. & Hopkins, M. J. (2025, May 22). Is Trump's executive order on Most Favored Nations drug pricing a wet noodle? Nags Head, NC: ADAP Advocacy. https://adapadvocacyassociation.blogspot.com/2025/05/is-trumps-executive-order-on-most.html

[20] United States Department of Health and Human Services. (2025, November 06). CMS Announces New Drug Payment Model to Strengthen Medicaid and Better Serve Vulnerable Americans. Washington, DC: United States Department of Health and Human Services: Press Room. https://www.hhs.gov/press-room/cms-announces-new-drug-payment-model-to-better-serve-vulnerable-americans.html

[21] White House, The. (2025, December 19). Fact Sheet: President Donald J. Trump Announces Largest Developments to Date in Bringing Most-Favored-Nation Pricing to American Patients. Washington, DC: The White House: Fact Sheets. https://www.whitehouse.gov/fact-sheets/2025/12/fact-sheet-president-donald-j-trump-announces-largest-developments-to-date-in-bringing-most-favored-nation-pricing-to-american-patients/

Trump Administration Pushes Two New Rebate Models, But Will They Help Patients?

By: Marcus J. Hopkins, Health Policy Lead Consultant, ADAP Advocacy

The Centers for Medicare and Medicaid Services (CMS) has released information about a new proposed mandatory pricing model—the Guarding U.S. Medicare Against Rising Drug Costs (GUARD) Model—that would assess the inflation rebate amounts paid for certain medications covered under Medicare Part D using a benchmark derived from international pricing information rather than using current domestic benchmarks (CMS, 2025).

Photo Source: CMS

The GUARD model is one of two pricing models being proposed by the Trump Administration—the other being the Global Benchmark for Efficient Drug Pricing (GLOBE), which would assess inflation rebates for drugs covered under Medicare Part B.

In both models, the Trump Administration plans to use modeling to employ drug “rebate models,” which are payment models ostensibly intended to lower the cost of medications by having drug manufacturers return a percentage of the purchase price to the buyers. These rebates are generally negotiated behind closed doors between payors, including pharmacy benefit managers (PBMs), insurers, and government programs, with drug manufacturers. Once those rebate amounts are set, drug manufacturers remit rebate payments to payors only after the drugs have been purchased and dispensed (SmithRx, 2025).

CMS's GUARD Model would attempt to reduce Medicare drug spending by tying prices to international benchmarks and collecting rebates from manufacturers when prices exceed those. 

Rebates, such as the proposed 340B Drug Pricing Program rebate model, can be an effective means of introducing cost savings into health care systems and indirectly helping patients, because they bring added transparency. In the case of the GUARD Model, they can also disadvantage patients. That is because the rebated price is not known at the time that the patient is dispensed the medication. Accordingly, out-of-pocket costs are calculated based on the higher "list" prices of drugs, forcing patients to pay more in deductibles, coinsurance, and copayments at the pharmacy counter.

In essence, the wider health care system may benefit from a rebate, but the patient may see no reduction in their costs. The 340B rebates differ from GUARD/GLOBE in that 340B rebates are specifically designed to be passed onto the consumer in the form of increased investment in/access to/savings for healthcare services. GUARD/GLOBE rebates are specifically designed to go to payors, with no requirements whatsoever that those revenues be reinvested or savings passed on.

Drug rebate models have been in place in the U.S. since the 1990s, with the creation of the Medicaid Prescription Drug Rebate Program (MDRP) under the Omnibus Reconciliation Act. They are also actively used in at least 31 European countries, including Italy, Portugal, Spain, France, Germany, and the United Kingdom (Vogler et al., 2012).

Photo Source: ADAP Advocacy | iStock

The primary rationale behind these rebate models is that requiring manufacturers to pay rebates to payors incentivizes drug manufacturers to keep drug prices lower. While this might be true in nations where this is a single payor, such as those listed above, rebate models in the U.S. have objectively poorer outcomes.

Recent research from the Leonard D. Schaeffer Institute for Public Policy & Government Service out of the University of Southern California found that, on average, every $1 increase in rebates was associated with $1.17 increase in list prices, particularly for single-source drugs—a Food and Drug Administration (FDA)-approved medication available from only one manufacturer, often lacking a generic equivalent, and specifically the types of drugs that will be evaluated under both the GUARD and GLOBE models being proposed (Sood et al, 2020).

Another study examined rebates for 444 unique branded medications and found that, while drug manufacturers may increase list prices in order to offer larger rebates to payors, consumers—particularly those lacking health insurance coverage—experienced statistically significant increases in out-of-pocket costs for those medications (Yeung et al., 2021).

Decades of research confirm what people living with HIV/AIDS already know: out-of-pocket costs lead to skipped doses, delayed refills, or complete abandonment of prescriptions. 

Public health data from the Centers for Disease Control show that a significant share of people living with HIV/AIDS (PLWHA) report cost-related non-adherence. A 2019 study found that 7% of PLWHA in the U.S. reported non-adherence to prescribed dosing due to cost-related concerns, with another 4% reporting skipping doses, 4% reporting taking less medicine, and 6% reporting delaying medication purchases (Beer et al., 2019).

Sadly, PLWHA facing affordability challenges may delay or abandon medications because they are unable to afford out-of-pocket costs.  These cost-saving behaviors are directly associated with lower rates of viral suppression, poorer health outcomes, and increased strain on the healthcare system.

Research has also demonstrated that very small cost-sharing amounts can have outsized effects. Studies examining HIV prevention and treatment medications have found that prescription abandonment rates rise sharply when out-of-pocket costs increase from $0 to even $10 (Dean et al., 2024). Persistence on therapy drops as costs rise—a finding that should concern everyone.

Photo Source: ADAP Advocacy | iStock

Put simply, when patients pay more, adherence suffers, and people's health suffers.

In order for rebates to truly result in lower costs for consumers, the U.S. would need to do away entirely with our multi-payor healthcare model, which requires different payors (both for-profit and government-based) each have to enter into pricing and rebate negotiations with drug manufacturers to set prices and rebate amounts.

Pressure campaigns are effective only when pressure is applied from all sides. While drug manufacturers are unlikely to abandon a revenue cash cow like the Medicare program, they still have non-Medicare-enrolled consumers onto whom they can push increased drug prices with few to no negative outcomes. Consumers have come to not only accept but also expect medication price inflation, especially when there are few, if any, viable comparable alternative therapies available to them.

What the GUARD and GLOBE programs are intended to do is force manufacturers to provide higher rebates for medications that CMS deems “too expensive.” This, they posit, will result in lower drug costs for seniors and those non-seniors who rely on Medicare for drug coverage. The reality is that those consumers will likely realize few, if any, net savings from these programs, so long as there are multiple payors willing to pay whatever price is needed to move medications to their customers.

Although the GUARD proposal may seem promising to some, it does not require that these rebates be automatically passed on to patients in the form of lower out-of-pocket costs. That central problem needs to be addressed before the proposal is finalized and implemented.

The proposal states that it hopes that lower GUARD prices will benefit patients. The proposal says that "[i]t is possible that in response to the alternative payments]" GUARD creates manufacturers might "reduce their net price" in an effort to reduce the GUARD Model rebate payments. If so, then there might be some chance that patients would benefit from the GUARD prices. 

But the "possibility" that GUARD "might" help patients at the pharmacy counter just is not good enough. ADAP Advocacy plans to submit public comment in response to these proposals that address the patient perspective.

Disclaimer: Guest blogs do not necessarily reflect the views of the ADAP Advocacy Association, but rather they provide a neutral platform whereby the author serves to promote open, honest discussion about public health-related issues and updates.

References:

[1] Beer, L., Tie, Y., Weiser, J., & Shouse, R. L. (2019, December 13). Nonadherence to Any Prescribed Medication Due to Costs Among Adults with HIV Infection — United States, 2016–2017. Morbidity and Mortality Weekly Report, 68(49): 1,129-1,133 http://dx.doi.org/10.15585/mmwr.mm6849a1

[2] Centers for Medicare and Medicaid Services. (2025, December 29). GUARD (Guarding U.S. Medicare Against Rising Drug Costs) Model. United States Department of Health and Human Services: Centers for Medicare and Medicaid Services: Priorities: Overview: Innovation Models. https://www.cms.gov/priorities/innovation/innovation-models/guard

[3] Dean, L. T., Nunn, A. S., Chang, H. Y., Bakre, S., Goedel, W. C., Dawit, R., Saberi, P., Chan, P. A., & Doshi, J. A. (2024). Estimating The Impact Of Out-Of-Pocket Cost Changes On Abandonment Of HIV Pre-Exposure Prophylaxis. Health affairs (Project Hope), 43(1), 36–45. https://doi.org/10.1377/hlthaff.2023.00808

[4] SmithRx. (2025, March 21). How Drug Rebates Influence Prescription Costs for Employers. San Francisco, CA: SmithRx. https://smithrx.com/blog/how-drug-rebates-influence-prescription-costs-for-employers

[5] Sood, N., Ribero, R., Ryan, M., & Van Nuys, K. (2020, February 11). The Association Between Drug Rebates and List Prices. Los Angeles, CA: University of Southern California: Leonard D. Schaeffer Institute for Public Policy & Government Service. https://schaeffer.usc.edu/research/the-association-between-drug-rebates-and-list-prices/ 

A HIV Drug Medicare Carveout Exemption is NOT All About the Profits

By: Marcus J. Hopkins, ADAP 340B Consultant

In July 2025, ADAP Advocacy submitted public comment to the Centers for Medicare and Medicaid Services (CMS) regarding the proposed guidance for the Medicare Drug Price Negotiation Program (“Negotiation Program”) established under the Inflation Reduction Act (2022), requesting a carveout exemption from forced price negotiations for medications used for the treatment of HIV.

Photo Source: ADAP Advocacy

After submitting this public comment, we took the opportunity to reach out to other HIV organizations, including the Aging and HIV Institute (A&H)’s David “Jax” Kelly, JD, MPH, MBA.

Kelly raised several key points that he believes would better center our arguments around patient access, medication affordability, and the elimination of barriers to accessing medications. These points, he told us, would help to reframe our argument to make it more patient-centered and less about pharmaceutical company participation in the Medicare market and profitability.

He was, in part, correct.

ADAP Advocacy is, at its heart, a patient-centered organization. From the beginning, our organization has prioritized patient access to HIV care, treatment, and supportive services. Our initial focus dealt with eliminating the waitlists that prevented patients in dire need of HIV treatment services from enrolling in state AIDS Drug Assistance Programs (ADAPs). Every aspect of our work has been patient-centered, and we have endeavored to frame every project, initiative, research effort, report, and infographic in a manner that prioritizes what is best for patients.

Our submission to CMS attempted to frame pharmaceutical company participation as a broader issue that could prevent patients from accessing their life-saving medications. We contend our framing achieved that objective, but nonetheless, we're open to alternative interpretations. After all, one of our organization's value statements reads, "That the voice of persons living with HIV/AIDS shall always be at the table and the center of the discussion."

With that in mind, ADAP Advocacy asked Kelly for his thoughts on the carveout. In his response, Kelly provided the following insights:

[The following comments were composed by David “Jax” Kelly, JD, MPH, MBA]

David "Jax" Kelly, JD, MPH, MBA

_____________________________________________

Medicare and HIV: A Lifeline for Long-Term Survivors

Nearly 28% of PLWH in the United States are Medicare beneficiaries, and most qualified through disability rather than age (Figueroa et al., 2024; Dawson, 2023). For this population, Medicare Part D is a lifeline, yet HIV medications account for a disproportionate share of program spending. In 2020, prescription drugs made up 63% of Medicare spending for PLWH compared to just 4% for other beneficiaries (Dawson, 2023).

This unique cost profile reflects both the effectiveness and the financial burden of HIV treatment. Interruptions in ART jeopardize not only individual health but also public health goals. Sustained viral suppression—essential to ending the epidemic—depends on reliable, affordable access to medications.

Moreover, a majority (61%) of Medicare beneficiaries with HIV are dually eligible for Medicaid, highlighting their financial and medical vulnerability (Dawson, 2023). These dual-eligible beneficiaries face some of the most complex systemic barriers and are at greatest risk if policy shifts raise out-of-pocket burdens.

Patient Affordability and Financial Burden

Even when medications are technically “covered,” high co-pays and cost-sharing can prevent patients from filling prescriptions. Research shows persistent gaps in ART adherence among Medicare beneficiaries with HIV, often tied to affordability barriers (Li et al., 2023).

The Inflation Reduction Act reshaped Medicare Part D plan designs, and analyses show that some changes may actually increase cost burdens for patients depending on their plan type (Cai et al., 2025; Doshi et al., 2025).

Consider a hypothetical example:

For a retired Medicare beneficiary living on $1,400 a month, an additional $100 in monthly drug costs could force a choice between filling an HIV prescription and paying for groceries or rent. For long-term survivors already managing multiple chronic conditions, even modest increases in out-of-pocket (OOP) costs can destabilize adherence and jeopardize viral suppression.

Drug coverage protections exist—ART is already a “protected class” under Part D—but these safeguards do not directly limit cost-sharing. Without a carveout, federal savings from negotiation could inadvertently be achieved at the expense of patient affordability and adherence.

Equity and Systemic Barriers

Medicare beneficiaries with HIV are disproportionately people of color, LGBTQ+ individuals, and long-term survivors. According to KFF, most (77%) qualified for Medicare through disability rather than age, and a majority (61%) are dually eligible for Medicaid (KFF, 2025). These data underscore the extent of financial and medical vulnerability within this population—reflecting the compounding effects of poverty, disability, and structural inequities.

The burden of prescription drug costs falls especially hard on people with HIV. While prescription drugs account for just 4% of Medicare spending among other beneficiaries, they represent 63% of Medicare spending for people with HIV (Dawson, 2023). This disproportionate reliance on costly medications makes beneficiaries uniquely exposed to policy changes that could shift costs onto patients.

Photo Source: HealthHIV

The most recent State of Aging with HIV Report adds further context. Nearly 80% of older adults living with HIV delayed or avoided care due to insurance or out-of-pocket costs, and almost half struggled to pay for housing, food, or utilities (HealthHIV, 2025). Insurance restrictions such as step therapy and prior authorizations are increasingly blocking or delaying access to needed HIV medications. At the same time, many report fragmented care: over one-third rely on emergency departments for non-urgent needs, while 63% lack access to case management services (HealthHIV, 2025).

These inequities extend beyond finances. Nearly half of older adults with HIV report feeling lonely or isolated, and more than three-quarters experience moderate to high levels of mental health stress (HealthHIV, 2025). Meanwhile, providers highlight systemic barriers as well: 59% cite shortages of clinicians trained in both HIV and geriatrics as the most pressing obstacle to appropriate care.

Equity in drug policy is not just a matter of fairness; it is central to survival. The National HIV/AIDS Strategy emphasizes reducing disparities in HIV outcomes for racial and ethnic minorities, LGBTQ+ communities, and older adults. If CMS drug price negotiations inadvertently increase barriers to HIV treatment, they risk undermining these national goals at a time when they are already under political attack.

Protecting affordability and uninterrupted access through a carveout would ensure that Medicare policy advances—rather than reverses—the nation’s commitment to equity in HIV care and outcomes.

_____________________________________________

Kelly’s comments offer additional clarity and justification in favor of a carveout exemption in a way that focuses less on the continued participation of pharmaceutical companies and more on the real-world needs of patients who rely upon the Medicare program.

One of the primary reasons we work with collaborative partners and organizations is to ensure that the work we’re doing is focused on meeting the needs of patients. ADAP Advocacy specifically works with other organizations and policy shops to inform, refine, and bring clarity to the positions we release.

We are incredibly grateful to Jax Kelly for helping us to fulfill that mission.

References:

Cai, C. L., Bhaskar, A., Kesselheim, A. S., & Rome, B. N. (2025). Changes in Medicare Part D plan designs after the Inflation Reduction Act. JAMA Internal Medicine. Advance online publication. https://doi.org/10.1001/jamainternmed.2025.4003

Dawson, L., Kates, J., Roberts, T., Cubanski, J., Neuman, T., & Damico, A. (2023). Medicare and people with HIV. San Francisco, CA: KFF. https://www.kff.org/hivaids/report/medicare-and-people-with-hiv/

Dickson, S., & Hernandez, I. (2023). Drugs likely subject to Medicare negotiation, 2026–2028. Journal of Managed Care & Specialty Pharmacy, 29(7), 732–739. https://doi.org/10.18553/jmcp.2023.29.3.229

Doshi, J. A., Li, P., Harrison, J., Romley, J., & McWilliams, J. M. (2025). Inflation Reduction Act provisions and Medicare Part D out-of-pocket costs for specialty drugs. JAMA Health Forum, 6(8), e233849. https://doi.org/10.1001/jamahealthforum.2025.1387

Figueroa, J. F., et al. (2024). Antiretroviral therapy use and disparities among Medicare beneficiaries with HIV. Journal of General Internal Medicine, 39(12), 3456–3464. https://doi.org/10.1007/s11606-024-08847-y

Figueroa, J. F., et al. (2025). Use of nonrecommended antivirals among Medicare beneficiaries with HIV. JAMA Network Open, 8(7), e2312345. https://doi.org/10.1001/jamanetworkopen.2025.8296

HealthHIV. (2025). The fourth state of aging with HIV national survey report. Washington, DC: HealthHIV. https://healthhiv.org/wp-content/uploads/2025/01/Fourth-HealthHIV-State-of-Aging-with-HIV-Report.pdf

Kakani, P., Kyle, M. A., Chandra, A., & Maini, L. (2024). Medicare Part D protected-class policy is associated with lower drug rebates. Health Affairs, 43(8), 1290–1298. https://doi.org/10.1377/hlthaff.2024.00273

Li, P., et al. (2023). Antiretroviral treatment gaps and adherence among people with HIV in Medicare. Journal of Acquired Immune Deficiency Syndromes, 92(2), 145–152. https://doi.org/10.1007/s10461-023-04208-8

Patterson, J. A., et al. (2024). Medicare Part D coverage of drugs selected for the Drug Price Negotiation Program. JAMA Health Forum, 5(2), e234562. https://doi.org/10.1001/jamahealthforum.2023.5237

Sadeghi, A., & Varisco, T. J. (2025). Medicare Drug Price Negotiation Under The Inflation Reduction Act: Ensuring the Continuity of Critical Real-world Pharmaceutical Studies. Value in health : the journal of the International Society for Pharmacoeconomics and Outcomes Research, S1098-3015(25)02466-0. https://doi.org/10.1016/j.jval.2024.12.012

White, E. N., Saxon, M., Hodge, J. G., Jr, & Michaels, J. (2023). Medicare Drug Pricing Negotiations: Assessing Constitutional Structural Limits. The Journal of law, medicine & ethics : a journal of the American Society of Law, Medicine & Ethics, 51(4), 956–960. https://doi.org/10.1017/jme.2024.12 

Disclaimer: Guest blogs do not necessarily reflect the views of the ADAP Advocacy Association, but rather they provide a neutral platform whereby the author serves to promote open, honest discussion about public health-related issues and updates.     

CALL TO ACTION: HIV Medication Carve-Out Exemption from the Medicare Drug Price Negotiation Program

By: Marcus J. Hopkins, ADAP 340B Consultant

ADAP Advocacy has submitted public comments to the Centers for Medicare and Medicaid Services (CMS) regarding the proposed guidance for the Medicare Drug Price Negotiation Program (“Negotiation Program”) established under the Inflation Reduction Act (2022):

While ADAP Advocacy’s objections to the Negotiation Program’s proposed implementation are several, our primary request is for the creation of a carve-out exemption for all medications used for the treatment of HIV/AIDS in the U.S. that would prevent these treatments from being eligible for any future Medicare price negotiations.

Photo Source: CMS

ADAP Advocacy has requested this carve-out exemption due to the serious nature of the threat facing People Living with HIV/AIDS (PLWHA), should HIV medications be selected as part of the Negotiation Program. While the HIV treatment landscape has improved significantly over the last 25 years, today only a handful of manufacturers continue to work in the HIV space, including Gilead Sciences, ViiV Healthcare, and Merck. Over the past decade, three manufacturers—Bristol Myers Squibb, AbbVie, and Johnson & Johnson—have withdrawn from the HIV space for various reasons, not least of which is the difficulty of competing in a landscape where many of the most significant innovations, including well tolerated single-pill regimens, long-acting injectable agents, and highly effective oral and injectable prophylaxis, have already occurred.

As part of this effort, ADAP Advocacy has also spearheaded a national sign-on letter seeking support from national, state, and local advocacy organizations. The letter and the signature form are available online at: https://www.adapadvocacy.org/letter-cms-hiv-carveout.php. 

The Negotiation Program essentially requires manufacturers to accept the final price after four negotiation meetings set by CMS, reject the offer, and pay a 95% excise tax on all of the medications sold to Medicare payors, or remove their products from the Medicare formularies altogether (Hammond, 2024). Because no business can feasibly accept a 95% excise tax and remain viable, manufacturers are left with the unenviable decision to either accept significant profit losses in the Medicare market or withdraw their drugs.

Photo Source: Inside Sources

The prospect of losing access to HIV medications paid for through Medicare poses a significant risk to PLWHA. Medicare is the 2nd-largest payor of HIV treatment and care in the United States, accounting for 39% of federal spending in 2020, and serving 28% of PLWHA (Dawson, et al., 2023). Additionally, 77% of PLWHA who are enrolled in Medicare first qualified for the program not because of age but because of a disability diagnosis.

Patients who lose access to HIV medications may fall out of treatment entirely, placing them at risk of dying from opportunistic infections or having their HIV mutate to develop resistance to the medications used to achieve viral suppression—when the number of actively replicating HIV cells drops below 200 copies per milliliter of blood. In addition to these primary risks, patients whose HIV is not virally suppressed, or undetectable, can pass along the virus to others. In contrast, those whose viral load is undetectable are unable to do so.

In addition to the carve-out for HIV medications, ADAP Advocacy made the following recommendations:

1. CMS should implement a standardized Market Fair Price calculation methodology that replaces the methodology outlined in section 60.3 that is clear, transparent, and made available to manufacturers at the time the Market Fair Price is determined and when the initial offer is made to manufacturers;
2. CMS should revise its definition of “selected drug” as set forth in section 30.1 to ensure limit the inclusion of multiple formulations and strengths of medications to ensure that price determinations and negotiations are made in good faith;
3. CMS should undertake an immediate patient engagement campaign prior to the implementation of the proposed guidance for the Negotiation Program to ensure that Medicare beneficiaries have a clear understanding of how the Program will directly impact them and to allow patients to provide meaningful feedback and opinions to help guide the program to better patient-centered outcomes; and
4. CMS should exclude any cost-effectiveness calculations that utilize biased and discriminatory metrics, including Quality-Adjusted Life Years and similar measures of medical intervention efficacy.

A precedent already exists for protecting vulnerable populations from the unintended consequences of changes to the healthcare ecosystem, as evidenced by Medicare’s six protected classes (6PC). In Medicare Part D, 6PC protects vulnerable seniors and low-income beneficiaries with severe and complex health conditions, while also allowing Part D insurance plans to utilize the necessary tools to control costs. Medicines for some of the sickest patients in Part D are covered within the six protected classes, including those for cancer, epilepsy, HIV/AIDS and mental illness. Many of these conditions require patients to attempt a variety of therapies before they and their doctor settle on the most appropriate treatment, so there is no one-size fits all medicine for these conditions (Johnson, 2019).

Photo Source: VAROS

Healthcare decisions for complex health conditions should be left to patients, and their doctors. For people living with HIV/AIDS, numerous factors come into play when determining the appropriate highly active anti-retroviral therapy (HAART). And now with the advent of injectable HIV therapy, such decisions take-on an entirely new dimension."

These recommendations represent the bare minimum of changes that should be made to the Negotiation Program. ADAP Advocacy asks advocacy organizations to add their names to the circulating sign-on letter, as it continues to work with legislative and administrative officials to ensure that patient voices are heard and their access to life-saving treatments is sustained.

[1] Dawson, L., Kates, J., Roberts, T., Cubanski, J., Neuman, T., & Damico, A. (2023, May 27). Medicare and People with HIV. KFF: HIV/AIDS. https://www.kff.org/hivaids/issue-brief/medicare-and-people-with-hiv/

[2] Hammon, J. (2024, August 19). Price controls – bad policy, big problems. Washington, DC: Paragon Health Institute. https://paragoninstitute.org/paragon-prognosis/price-controls-bad-policy-big-problems/

[3] Inflation Reduction Act of 2022, Pub. L. No. 117-169, 136 Stat. 1818 (2022). https://www.congress.gov/117/plaws/publ169/PLAW-117publ169.pdf

[4] Johnson, Juliet (2019, January 31). New Research Shows Changes to the Six Protected Classes Would Harm Most Vulnerable Patients and Are Unnecessary. ADAP Blog. Retrieved online at https://adapadvocacyassociation.blogspot.com/2019/01/new-research-shows-changes-to-six.html 

Disclaimer: Guest blogs do not necessarily reflect the views of the ADAP Advocacy Association, but rather they provide a neutral platform whereby the author serves to promote open, honest discussion about public health-related issues and updates.     

Prior Authorization: A Growing Headache for Patients

By: Ranier Simons, ADAP Blog Guest Contributor

Amidst all the complicated machinations of the U.S. healthcare system, the ultimate focus should be the patient's best interests. Unfortunately, many barriers interfere with physicians and patients working together for the most optimal outcomes. One of those pervasive barriers is prior authorization. Prior authorization (PA) is when insurers require healthcare providers to obtain pre-approval for things such as services, procedures, durable medical goods, and medications. The pre-approval is required before insurance companies will agree to pay for a requested intervention. Insurance industry messaging claims that prior approvals are in the best interests of patients to make sure that inappropriate care is not needlessly utilized, thus saving them money, lowering healthcare system expenditures, and ensuring only the most effective options for care are chosen by physicians. 

Photo Source: Salon (Getty Images/FG Trade)

However, PAs are not in patients' best interests but are a method of cost control or cost-cutting to save insurers money. Jen Laws, CEO of Community Access National Network, states, “Taking a note from auto carriers, payers have been utilizing prior authorization as a bet that most folks don't have time, energy, or navigation experience enough to fight for the care patients rightly need. It's delay and deny on the bet that patients will give up." PAs have detrimental effects on patient health outcomes, interfere with the patient-physician relationship, unduly burden physicians, and ultimately generate more healthcare spending, because of medical interventions needed because of the poor patient outcomes they can cause.

For several years, many groups have been fighting for prior authorization reform. Recently, in a step in the right direction, the Centers for Medicare and Medicaid Services (CMS) released their Final Prior Authorization and Interoperability Rule (CMS-0057-F).[9] Even though it is a win for patients and providers, it is not enough. As such, legislatures nationwide are working on state-level legislative remedies to the prior authorization problem. Some states have already passed more stringent measures, and others have bills in process.[6]

The new rule has many details, but there are some notable highlights. A significant problem with the prior authorization process is the excessive time burden placed on medical providers.[1] According to a 2022 American Medical Association (AMA) survey, physicians and their staff spend an average of about 14 hours, roughly two business days per week, completing around 45 PAs per physician.[7] Historically, much of the PA process is manual, requiring long phone calls and forms to be filled out, faxed, or sent through postal mail. The CMS rule helps with this by requiring insurers to support an electronic prior authorization process that is embedded in the physician’s electronic health records. This streamlines the process and helps with automation since the electronic health record is a centralized place where physicians do much of their work. Patients regularly see their physician typing things like notes and prescription requests in the examination room during their visits.

Photo Source: American Medical Association

Another remedy the new CMS rule delivers is transparency. When PAs are often denied, physicians and patients don’t know why since the insurers don’t give clear reasoning. They respond with opaque responses such as deeming a requested medical intervention as ‘medically unnecessary’. The new rule requires insurers to give very specific reasons for denial. This will not only enable providers to refute and appeal denials more effectively but can result in more accountability of insurers. Having to provide precise reasoning will result in insurers being more cautious with denials. CMS furthers transparency requirements by requiring metrics reporting. The new rule requires insurers to publicly report their actions such as how often they approve and deny PAs, how long they take to make decisions, as well as the frequency of denials and approvals by medical ailment category. This will enable patients to be informed consumers as they shop for insurance coverage. 

The new CMS rule has many positive details but also limitations. The ruling does not pertain to prescription drugs. The ruling also only applies to government-regulated health plans such as Medicaid, CHIP, Medicaid managed care plans, and plans on the healthcare exchange. The electronic PA requirement goes into effect in 2027, and the metric reporting goes into effect in 2026. To create more substantial changes, some states have already passed PA reform legislation, and many others are working on it. The District of Columbia has already passed legislation with some of the same aspects as the CMS ruling, but also goes further.

The District of Columbia passed Bill 25-124, which became ACT 25-301 in November 2023.[5] The act has an electronic PA requirement in the same manner as the CMS rule. It requires all review entities to accept and respond to PA requests using their NCPDP SCRIPT Standard ePA transaction by January 1, 2024.[5] The D.C. Act goes beyond the CMS ruling regarding required timeframes for PA decisions. The CMS ruling requires review entities to respond within 72 hours for expedited urgent care PA requests and within seven days for standard requests. The D.C. Act requires review entities to respond within 24 hours with approval or denial of urgent care PA requests.[5] For standard requests, it specifies a response within three business days by electronic portal or five business days by mail, fax, or telephone.[5]

North Carolina is one of the states with pending PA legislation. Its details also contain some requirements that are more stringent than those of CMS. Like the D.C. Act, one highlight is its timetable for review response specification. For non-urgent healthcare services PA requests, an insurer must decide within 48 hours of obtaining all required information and within 24 hours for urgent care requests.[10] The North Carolina bill also contains transparency language. Suppose the reviewing entity of an insurer questions the medical necessity of a physician’s PA request. In that case, it must notify the provider within five business days of the date of the request.[10] Also, before issuing a PA denial, the insurer must allow the affected provider to discuss the need for the medical service on the telephone directly with the medical doctor who will be responsible for the review determination.[10]

Photo Source: American Medical Association

Current and developing state legislation model suggestions supported by the AMA. One of those is “gold carding”. Five states have already passed gold carding legislation: Louisiana, Michigan, Texas, Vermont, and West Virginia.[6] In gold carding, six months of a medical practice or provider’s prior authorizations are reviewed. If 90% of the requests are approved, then that practice or provider is not subject to any PA requirements for six months.[6,8] Maintaining those statistics would be required to maintain the privilege. While on the surface, it seems to be a good way to reduce the volume of PAs, thus reducing administrative time waste, it has a downside. As Jen Laws points out, “Gold carding can come with the incentive for payors to become even more aggressive in their PA and other UM (utilization management) practices because it rests on the idea that a provider can "prove" they don't need review. The best way around that is to merely get more aggressive with UM, moving the goalpost to an unattainable standard.”

The adverse effects of prior authorizations are well documented. They cause physician burnout, interfere with the patient-provider relationship, and cause delays in patient care.[3,7] Delays in patient care can result in avoidable poor patient health outcomes and exacerbation of disease states.[2,3,4] In diseases such as cancer, timely and very personalized treatment can be a matter of life and death. Physicians make very informed decisions about their patients’ medical care. When physicians make evidence-based treatment determinations for their patient's best health, they should not be undermined by profit-centric cost-cutting measures that are not based on proper consideration of current medical data. Pushing forward to ensure transparency and accountability is critical. It will take continued federal and state efforts to create a healthcare landscape that genuinely has the patient at its center.

[1] Medical Ecconomics. (2023, August 4). 2023 Physician Report: The latest physician salary, productivity and malpractice cost data. Retrieved from https://www.medicaleconomics.com/view/2023-physician-report-the-latest-physician-salary-productivity-and-malpractice-cost-data?slide=18

[2] Sausser, L. (2023, December 2023). Cancer patients face frightening delays in treatment approvals. Retrieved from https://kffhealthnews.org/news/article/cancer-patients-prior-authorization-treatment-delays/

[3] Merrill, J. R., Flitcroft, M. A., Miller, T., Beichner, B., Clarke, C. N., Maduekwe, U. N., Wang, T. S., Dream, S., Christians, K. K., Gamblin, T. C., Evans, D. B., & Kothari, A. N. (2023). Patterns of Unnecessary Insurer Prior Authorization Denials in a Complex Surgical Oncology Practice. The Journal of surgical research, 288, 269–274. https://doi.org/10.1016/j.jss.2023.03.013

[4] Miller, T. (2023, November 7). Big insurance met its match when it turned down a top trial lawyer's request for cancer treatment. Retrieved from https://www.propublica.org/article/blue-cross-proton-therapy-cancer-lawyer-denial#:~:text=Blue%20Cross%20and%20Blue%20Shield%20denied%20payment%20for%20the%20proton,he%20was%20ready%20to%20fight.

[5] Council of the District of Columbia. (2023, November 15). D.C. ACT 25-301 Prior Authorization Reform Amendment Act. Retrieved from https://lims.dccouncil.gov/downloads/LIMS/52301/Signed_Act/B25-0124-Signed_Act.pdf?Id=180462

[6] Sable-Smith, B. (2024, February 12). States target health insurers' 'prior authorization' red tape. Retrieved from https://kffhealthnews.org/news/article/states-health-insurers-prior-authorization-legislation-gold-carding/

[7] American Medical Association. (2023). 2022 AMA prior authorization (PA) physician survey. Retrieved from https://www.ama-assn.org/system/files/prior-authorization-survey.pdf

[8] American Medical Association. (2024, January 24). Advocacy in action: Fixing prior authorization. Retrieved from  https://www.ama-assn.org/practice-management/prior-authorization/advocacy-action-fixing-prior-authorization

[9] Centers for Medicare and Medicaid Services. (2024, January 17). CMS Finalizes rule to expand access to health information and improve the prior authorization process. Retrieved from https://www.cms.gov/newsroom/press-releases/cms-finalizes-rule-expand-access-health-information-and-improve-prior-authorization-process

[10] North Carolina General Assembly. House Bill 649 - Ensure Timely/Clinically Sound Utiliz. Review. Retrieved from https://www.ncleg.gov/Sessions/2023/Bills/House/PDF/H649v0.pdf

Disclaimer: Guest blogs do not necessarily reflect the views of the ADAP Advocacy Association, but rather they provide a neutral platform whereby the author serves to promote open, honest discussion about public health-related issues and updates.