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/ 

Is Trump's Executive Order on Most Favored Nations Drug Pricing a Wet Noodle?

By: Ranier Simons, ADAP Blog Guest Contributor, and Marcus J. Hopkins, ADAP 340B Consultant

The Trump Administration’s policies continue to generate uncertainty and disarray in most sectors of the economy in the United States, especially healthcare. On May 12, 2025, another executive order aimed at “reducing prescription drug costs” was signed. The President issued Executive Order (EO) 14297, ‘Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients’, with the false claim that prescription drug and pharmaceutical prices will be reduced, almost immediately, by 30% to 80%. In actuality, the EO is vague, flawed, and has the potential to do damage to many areas within the healthcare ecosystem. The EO was presented as a strong-armed mandate to effect swift change to the status quo. However, STAT’s Matthew Herper reported, "As pharmaceutical investors see it, he stomped loudly and wielded a wet noodle" (Herper, 2025).

Photo Source: The White House

The premise of the EO is that the status quo of what the United States pays for prescription drugs compared to other developed foreign markets is unfair; thus, the imbalance needs to be corrected. The narrative presented is that drug manufacturers are taking advantage of American consumers and the government by charging the United States exorbitant prices for drugs to offset the low prices other foreign governments demand for the same drugs. A direct quote from section one of the EO states, “Drug manufacturers, rather than seeking to equalize evident price discrimination, agree to other countries’ demands for low prices, and simultaneously fight against the ability for public and private payers in the United States to negotiate the best prices for patients.”

According to the nonprofit RAND Corporation, a nonpartisan research organization, the United States pays almost three times what approximately 33 other comparatively developed nations pay for the same prescription drugs (Mulcahy, Schwam & Lovejoy, 2024). However, RAND Corporation’s 'apples to apples' findings ignore numerous factors that separate the United States from the other developed nations, thus calling into question the simplified comparison.

The following is an overview prepared by ADAP Advocacy on how the mechanisms of the EO describe solutions to the problem, including relevant notes:

1. Ordering the Secretary of Commerce to identify “foreign nations freeloading”—a catch-all term that will attempt to identify any “act, policy, or practice” that may be “unreasonable or discriminatory” or that “may impair United States national security and that has the effect of forcing Americans to pay for a disproportionate amount of global pharmaceutical research and development, including by suppressing the price of pharmaceutical products below fair market value.” (Editor's Note): This process is unlikely to consider that almost all these developed nations do not use the free-market for-profit healthcare model used by the United States, but have implemented a Universal or Single-Payer healthcare model. This means that there is one organized purchaser of these medications. If pharmaceutical companies wish to sell their products in those countries, they can either agree to the terms that those nations specify for the drugs or refrain from selling their drugs there. Meanwhile, in the United States, a patient's price for a drug can vary significantly from patient to patient, depending on their insurer. This means that every single payor (except for Medicare) must negotiate with pharmaceutical companies to determine what price they will pay, and those negotiations are protected by “trade secrets” laws that shield the entire process from consumers and most lawmakers.
2. Enabling direct-to-consumer sales of drugs from pharmaceutical companies to patients. This is an interesting proposal that can potentially eliminate several middlemen from the existing domestic drug procurement and purchasing system. (Editor's Note): Currently, by the time a patient actually purchases a medication from their pharmacist, it has already passed through at least two middlemen—drug wholesaling companies and pharmacy benefit managers (PBMs)—and each middleman is attempting to make a profit. This means that, even if the starting acquisition cost of a medication is $20/bottle, to make a profit, the wholesaler will mark up the cost to $22/bottle, which will require the pharmacy to mark up the cost to $24/bottle…but then, for the PBM to make a profit, they will pocket a percentage of the reimbursement to the pharmacy, which will necessitate increasing the price to $26/bottle in order for the pharmacy to make a profit.
3. By allowing pharmaceutical companies to sell their drugs directly to patients, the Trump Administration could potentially decrease consumer costs, but risks putting pharmacies out of business or creating a model where pharmaceutical companies could purchase pharmacies outright and increase their profits while putting local and community pharmacies out of business.
4. Enabling “Most-Favored-Nation Pricing” (MFN) by instituting price controls through administrative rulemaking. This would allow the Secretary of the U.S. Department of Health and Human Services (HHS) to request that pharmaceutical manufacturers come to the table with the federal government to agree upon a maximum price that they can charge for medications in the United States. This would first be done voluntarily…with the threat of involuntary price controls and the removal of drug approval by the U.S. Food and Drug Administration (FDA).

Photo Source: Market.us Media

If pharmaceutical companies don’t agree to the terms set forth by this administration, the various Department Secretaries are empowered to:

a.) Propose a rulemaking plan that would “impose most-favored-nation pricing;”

b.) Allow drug importation from foreign countries (a position which ADAP Advocacy vehemently opposes);

c.) “Review” potential actions that could be taken to prevent the exporting of drugs to other countries (i.e., forbid U.S.-based manufacturers from exporting drugs);

d.) Review and modify approvals granted for drugs, which would force drug manufacturers to take their medications off the market—a punitive move that is likely illegal (Payne & Silverman, 2025); and

e.) “…address global freeloading and price discrimination against Americans.”

On its face value, the EO is hazy and does not explain much of its implementation. The overall theme is ‘facilitate, study, and propose’. There are several essential questions the EO leaves unanswered:

• How will HHS determine “Most-Favored-Nation” pricing?

• Which classes and how many drugs will be included in this pricing?

• Will this only apply to drugs purchased by Medicaid, Medicare, and Veterans Affairs, or will this apply to commercial insurers and the uninsured, as well? (Franco, 2025)

Most importantly, much of what the President desires to do requires cross-agency cooperative Congressional legislative action (Payne & Silverman, 2025). Nothing in the EO represents actionable endeavors that will reduce drug prices for Americans in the immediate future. For example, the EO directs HHS to set target prices for negotiations with drug manufacturers in the next 30 days. If, after an unspecified time, drug manufacturers have not voluntarily made “significant progress,” that is when rulemaking will begin to force MFN pricing.

Politics surely makes for strange bedfellows. Congressional Democrats were quick to embrace this latest EO – evidenced by Representative Ro Khanna, who represents California's 17th congressional district, introducing legislation to codify MFN into law. Sen. Bernie Sanders, one of the pharmaceutical industry’s greatest detractors, called on Republicans to support federal legislation mirroring the EO. It is unlikely any Republican would support an effort to impose price controls on pharmaceutical products.

Photo Source: X

The top two Republican Senators, Senate Majority Leader (SD) and Senate GOP Whip John Barrasso (WY), have already expressed skepticism about an MFN pricing model. Wall Street didn't seem too alarmed by its prospects, either. POLITICO's headline read, "Wall Street shrugs at Trump’s most-favored order," in an article that featured colorful responses from investment groups. Still, some organizations remain on the fence (Gardner & Lin, 2025).

The reality is that the MFN approach to "fixing" healthcare costs associated with prescription drugs ignores the complexities of the healthcare ecosystem. Moreover, instituting MFN pricing would be financially devastating to drug manufacturers. It would result in a drastic revenue reduction in tandem with the Trump Administration’s recently threatened pharmaceutical tariffs (Reed, 2025). It is not sustainable for pharmaceutical companies to lower domestic prices to the levels of the lowest foreign countries. In speaking with the Wall Street Journal, Stephen Schondelmeyer, a professor of pharmaceutical economics at the University of Minnesota College of Pharmacy stated, “The first thing we have to realize is if another country’s getting a drug at one-tenth of the price that we are, we’re not going to get all of our drugs at one-tenth of the price we’re paying now” (Hopkins & Loftus, 2025). 

For example, instituting an international pricing model for Medicaid would cost drug manufacturers an estimated $1 trillion over the span of a decade (Hopkins & Loftus, 2025). Drug companies would have to raise the prices that other countries are paying for drugs. Coincidentally, the President stated that other countries will have to pay more for drugs to expressly pay their ‘fair share’ for innovation and development (Hopkins & Loftus, 2025). Thus, the administration aims to disrupt the global pharmaceutical market. Convincing other countries to modify and increase their expenditures drastically does not appear plausible.

MFN pricing also threatens programs like the 340B Drug Pricing Program, given that it would drastically reduce rebates. Reducing 340B funding would adversely affect providers and covered entities that serve vulnerable populations (Lopez, 2025). This change would have a devastating impact on the State AIDS Drug Assistance Programs (ADAP). There could also be unintended consequences for the Medicaid Drug Rebate program, as MFN pricing would reduce federal matching Medicaid dollars. Dangerously, the MFN idea tangentially invites using quality-adjusted life years, or QALY, to make pricing decisions. While outlawed in the United States, many foreign governments use QALYs, which are discriminatory methodologies that devalue the lives of vulnerable populations. These measures also ignore the lived experiences of diverse racial and ethnic groups (Lopez, 2025).

Photo Source: STAT News

PlusInc, a nonprofit dedicated to health equity, has demonstrated how QALYs fuel health disparities. In a recent analysis, PlusInc argued, "If the math behind QALYs seems obtuse, you’re not alone—one of the primary criticisms of the QALY is that the methodology behind determining how a QALY is measured is predicated upon a lot of assumptions that may or may not hold true across every community. Some recognized experts who have studied QALYs have expressed concern over their impact on health equity."

Mike Eging, who leads the Rare Access Action Project (RAAP), summarized many of the concerns being expressed about the proposal: "Many rare products are developed through family foundations set up by patients and families to seek therapies to treat not just loved ones, but also their patient communities. Others are discovered by passionate scientists in universities, or through emerging smaller companies with only one or two products in development. These efforts can lead to therapies, some of which are never launched overseas due to price controls and regulatory hurdles. Or, they require partnerships with larger companies to navigate an expensive launch in Europe, at a price they no longer control. Further, some emerging rare companies never launch in Europe due to these challenges. Application of MFN to rare products could have a chilling effect on investment in these situations and across the rare disease in general. Rare medicines were exempted from the first iteration of this policy. We hope that continues."

EO 14297 is rife with vagaries but has the potential to do more harm than good. Threatening pharmaceutical revenues could reduce investment in developing needed therapies (Lopez, 2025). Legally, as it stands, the government would not be able to set prices outside of the Medicare program. Mandating the pricing of commercial, privately owned companies would require acts of Congress that would take lots of time and litigation (Jacobson, 2025). Patients could lose medication access due to a complex system response to adversarial price negotiations. Disrupting foreign markets could adversely affect international relations.

The ongoing debate over drug pricing in the United States is essential to the overall healthcare conversation. However, the EO does not present a foreseeable effective path for improving the status quo. In agreement with the EO’s objective of more equitably sharing research and development costs across countries, a Lily spokesperson expertly summarized the challenge stating, “an MFN approach is not the answer to help patient affordability; instead, lower prices for consumers in the United States can only happen if intermediaries take less for themselves” (Hopkins & Loftus, 2025). For these reasons, it is hard to understand why any patient advocacy organization could find itself supporting this approach.

[1] 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

[2] Gardner, L., Lin, D. (2025, May 13). Wall Street shrugs at Trump’s most-favored order. Retrieved from https://www.politico.com/newsletters/prescription-pulse/2025/05/13/wall-street-shrugs-at-trumps-most-favored-order-00342967

[3] Herper, M. (2025, May 13). To understand why investors rejoiced at Trump’s attack on drug firms, think like a pharma CEO. Retrieved from https://www.statnews.com/2025/05/13/trump-drug-pricing-plan-analysis/

[4] Hopkins, J., Loftus, P. (2025, May 12). Drugmakers Avoid Worst-Case Pricing Scenario for Now. Retrieve from https://www.wsj.com/health/pharma/trump-drug-price-plan-pharmaceutical-companies-217f809b?st=UrWWgU&reflink=desktopwebshare_permalink

[5] Lopez, T. (2025, May 14). Most Favored Nation vs. Human Sustainability: How Federal Price Controls Fight Biology—and Americans Lose. Retrieved from https://nmqf.org/resource-library/most-favored-nation-vs-human-sustainability-how-federal-price-controls-fight-biology-and-americans-lose/

[6] Mulcahy, A., Schwam, D., Lovejoy, S. (2024, February 1). International Prescription Drug Price Comparisons: Estimates Using 2022 Data. Retrieved from https://www.rand.org/pubs/research_reports/RRA788-3.html

[7] Jacobson, L. (2025, May 14). Donald Trump exaggerates speed, certainty of prescription drug price reductions. Retrieved fromhttps://www.politifact.com/factchecks/2025/may/14/donald-trump/prescription-drug-price-cut-executive-order/

[8] Payne, D. & Silverman, E. (2025, May 12). Our biggest burning questions on Trump’s order to bring down drug prices. Retrieved from https://www.statnews.com/2025/05/12/trump-executive-order-drug-prices-analysts-five-questions-agency-authority-court-challenges/

[9] Reed, T. (2025, May 7). Pharma shipments surge as Trump tariff threat looms. Retrieved from https://www.axios.com/2025/05/07/tariffs-imports-drugs-pharmaceuticals

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.   

Do Consumers Deserve Rx Savings?

Guest Blog By: Marcus J. Hopkins, Blogger

In 2017, President Trump became infamous for proclaiming, “Nobody knew healthcare could be so complicated.” In reality, every legislator and policy wonk in America knew healthcare was complicated; but, for everyday Americans, healthcare is often no more complicated than going to a physician and being treated. When you get into the weeds of how the whole system (in America…) works, it becomes needlessly complex with so many working parts, it’s no wonder a stable genius can make neither heads, nor tales of it.

Photo Source: Me.me

This is the case with drug pricing. For people living with HIV/AIDS (PLWHAs) and other chronic illnesses that require “specialty” pharmaceutical products (read: drugs), what happens between our prescriptions being written and the price we pay for purchase is often so nebulous that trying to decipher the process as a layman is nigh impossible.

High drug prices have long been fodder for impassioned debates between manufacturers who insist that they only price drugs at “what the market will bear,” patient advocates who insist that out-of-pocket costs are too high, and government officials who wring their hands about drug prices, but do little to actually control or lower them. Are these higher brand name drug prices justified? Is it ethical for companies to exponentially increase the price of medicines? What is the purpose of having a Wholesale Acquisition Cost (WAC – which is the list price set by manufacturers) if no one is going to pay it after rebates, discounts, coupons, and pricing agreements? None of these questions ever REALLY get answered, because doing so would send shockwaves through the pharmaceutical industry – and frankly, that’s not such a bad idea.

All these price negotiations and rebates are done behind the scenes, all of which are protected by existing trade secrets laws that prevent the final cost of drugs from being publicly listed, meaning that consumers rarely ever know or realize that the end price they pay when they pick up their prescriptions reflects a price that could be lower if insurance plans changed where those rebates are discounted. Furthermore, as healthcare costs continue to increase by large margins while real wages have stagnated, U.S. consumers end up paying considerably more for medications than any other nation in the industrialized world.

As the cost of health insurance continues to increase, the number of consumers saddled with High-Deductible Health Plans (HDHPs) continues to burgeon, meaning that, during the deductible phase of the policy, patients who have not yet met their deductible are accountable for the full cost of their medications. In most existing payor landscape, if the payor (the insurance company/plan) has negotiated a rebate with the manufacturer, the patient assumes the full burden of the drug cost up front and the payor later receives the rebate on the back end. Payors argue that this practice allows them to “keep member benefit costs – deductibles, co-pays, and premiums – lower.” What ends up happening, however, is that consumers end up paying more, while payors are able to pocket more of the money and lower their share of cost.

Another model, however, exists, where manufacturer rebates are applied at the Point of Sale (POS), lowering the cost to consumers. This requires the payor to assume a greater share of the costs, but those can be offset by minute increases in premiums, allowing the consumer to pay less overall.

If all of this seems mind-numbingly wonky, that’s because it is. The whole landscape of pricing, payors, 340B, ADAP, Medicaid, Medicare, and consumers is such a snarled web of negotiations, rebates, discounts, coupons, and double-dipping, it’s virtually impossible to walk away with an operational understanding of the system in a single blog post. It would likely take an entire year of blog posts just to demystify every aspect of what goes into this mess, and even then, a lot is still protected by trade secrets laws.

If the Centers for Medicare and Medicaid Services (CMS) under this Administration is so determined to save consumers money on drug prices, what really needs to be done is for manufacturers to just lower drug prices. But, that doesn’t serve their primary goal of making more money. The pharmaceutical industry has established a web of systems wherein each individual entity (e.g. – pharmacies, insurers, Medicaid, ADAP) has to individually negotiate with them for a private gross price (“gross,” in this instance not meaning disgusting…but, only just) for the purchase of their products. On top of that, the manufacturers offer them rebates for each purchase, which drives the cost to the payor even lower (and they keep the difference between the gross and rebated prices).

Photo Source: Piper Report

Because those negotiated prices can’t be revealed publicly, it allows the manufacturers the ability to charge different entities higher or lower prices, thereby increasing or decreasing their profit margins. This kind of pricing structure is virtually unheard of in other parts of the world, because those governments were smart enough to adopt a universal healthcare model, rather than this patchwork quilt system we have in America. Instead, we get stuck with this Frankenstein’s Monster that allows these companies to amass record profits, all while pretending that the cost of research and development justifies the outlandish prices they charge for their products (much of which has already been paid for using taxpayer dollars, meaning they’re essentially selling these products BACK to us).

While it’s great that the pharmaceutical industry claims it wants to help consumers by moving rebate discounts to the front end, their efforts do nothing to mitigate the rising cost of healthcare.

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. 

Summer is Hot, but the Debate Over Drug Pricing could be even Hotter

By: Brandon M. Macsata, CEO, ADAP Advocacy Association

Temperatures across the United States are sizzling with the arrival of summer, but they could pale in comparison to the emerging debate over the rising cost of prescription drugs. A state ballot initiative, coupled with a rumored presidential executive order and pending federal legislation in Congress are setting the stage for a heated battle over drug pricing.

In Ohio, voters are already being inundated with 30-second political attack ads from both sides of the debate. One advocate in the state has said, "Every commercial break is flooded with them... and it is only summer." The "Ohio Drug Price Relief Act" will take center stage before the voters in November 2017, with spending on political ads expected to break all previous records for any statewide ballot initiative.

The ballot initiative would "require the state of Ohio to pay no more for prescription drugs than the U.S. Department of Veterans Affairs (VA), which has negotiated a discount of up to 40 percent."[1] It is supported by the Ohio Taxpayers for Lower Drug Prices, and it is opposed by the Ohioans Against the Deceptive Rx Ballot Issue. Veterans groups have also lined up against the ballot initiative.

According to Ballotpedia, a "yes" vote supports the measure to require state agencies and programs to purchase prescription drugs at prices no higher than what the VA pays for them, and a "no" vote opposes the measure to require state agencies and programs to purchase prescription drugs at prices no higher than what the VA pays for them.[2]

"I would assume that the happiest people in Ohio today are the people who are selling television commercials. The pharmaceutical industry will spend whatever they believe they need to spend to try to confuse and mislead the public," summarized Rick Taylor, a consultant for the Ohio Taxpayers for Lower Drug Prices.[3] Here is a political ad airing in support of the ballot initiative:

Source: Ohio Taxpayers for Lower Drug Prices

Curt Steiner, campaign manager for the Ohioans Against the Deceptive Rx Ballot Issue, argued, “Experts who have studied the proposal — including three former Ohio Medicaid Directors and a former state Budget Director — say it’s not only unworkable, but could actually increase prescription drug costs for the majority of Ohioans and reduce patient access to needed medications.”[4] Here is a political ad running against the ballot initiative:

Source: Ohioans Against the Deceptive Rx Ballot Issue

With the ballot initiative over four months away, voters in Ohio might simply turn off their televisions rather than contend with the forthcoming onslaught of these negative ads. There has been no public polling released on the issue in Ohio (...yet), but a similar ballot initiative failed last November in California.

In the meantime, news reports are floating that President Donald J. Trump plans to issue an executive order on drug pricing, though the timeline remains unclear. A draft version of the executive order, which was obtained by The New York Times, appears to give into demands by the pharmaceutical industry and rolls back numerous regulations.[5]

Some had hoped for rebates in Medicare Part D that would be similar to Medicaid,[6] but they appear absent from the draft obtained by The New York Times. Such a move would have greatly benefited consumers. It hard to see how the draft executive order would assist consumers, or public payors — such as State AIDS Drug Assistance Programs.

The measure is already being met with skepticism, especially because it appears to roll-back discounts authorized under the 340B Drug Discount Program. Dr. Joshua M. Sharfstein, a professor at Johns Hopkins Bloomberg School of Public Health, summarized this concern by saying, “That’s one that sticks out as a bit of a head scratcher. This is the executive order to lower drug prices — why would you put in a provision that would raise drug prices?[7]

Speaking for many in the patient advocacy community, Eddie Hamilton with the ADAP Educational Initiative questioned, "We don’t have any further information on this proposed draft, but it does raise some concerns. It appears to target 340B and the hospitals are, of course, screaming but we can’t verify that our community will be spared."

Congress isn't absent from the debate over drug pricing. In fact, a recent article in Roll Call spelled out the enormous pressure faced by lawmakers to do something on lowering the cost of prescription drugs. Presently, 802 bills addressing drug pricing have been introduced in Congress since the beginning of the year. Among them are the following:

• S.1369 - A bill to amend the Internal Revenue Code of 1986 to establish an excise tax on certain prescription drugs which have been subject to a price spike, and for other purposes. (Note: H.R.2974 is the companion legislation before the House of Representatives)
• S.1131 - Fair Accountability and Innovative Research Drug Pricing Act, which is a bill to require reporting regarding certain drug price increases, and for other purposes. (Note: H.R.2439 is the companion legislation before the House of Representatives)
• H.R.1316 - Prescription Drug Price Transparency Act, which is a bill to amend title XVIII of the Social Security Act to provide for pharmacy benefits manager standards under the Medicare prescription drug program and Medicare Advantage program to further transparency of payment methodologies to pharmacies, and for other purposes.
• H.R.242 - Medicare Prescription Drug Price Negotiation Act, which is a bill to amend part D of title XVIII of the Social Security Act to require the Secretary of Health and Human Services to negotiate covered part D drug prices on behalf of Medicare beneficiaries.

Ballot initiatives, executive orders, and legislation are all stoking the flames over the drug pricing debate, but they don't even include ongoing litigation filed by 20 state attorney generals. It is clear that the issue has reached a climactic point and something needs to be done about it. The ADAP Blog will continue to monitor each of these developments.

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[1] Pelzer, Jeremy (2017, May 3). Fight over Ohio Drug Price Relief Act ballot issue could set spending record. Cleveland.com. Retrieved from http://www.cleveland.com/politics/index.ssf/2017/05/fight_over_ohio_drug_price_rel.html.
[2] Ballotpedia. Ohio Drug Price Standards Initiative (2017). Retrieved from https://ballotpedia.org/Ohio_Drug_Price_Standards_Initiative_(2017). 
[3] Pelzer, Jeremy (2017, May 3). Fight over Ohio Drug Price Relief Act ballot issue could set spending record. Cleveland.com. Retrieved from http://www.cleveland.com/politics/index.ssf/2017/05/fight_over_ohio_drug_price_rel.html.
[4] Troy, Tom (2017, May 23). Opponents launch TV ad against Ohio Drug Price Relief Act. The Toledo Blade. Retrieved from http://www.toledoblade.com/State/2017/05/23/Opponents-launch-TV-ad-against-Ohio-Drug-Price-Relief-Act.html.
[5] Kaplan, Shelia, and Katie Thomas (2017, June 20). Draft Order on Drug Prices Proposes Easing Regulations. The New York Times. Retrieved from https://www.nytimes.com/2017/06/20/health/draft-order-on-drug-prices-proposes-easing-regulations.html.
[6] Nather, David (2017, May 12). Mulvaney says Trump wants executive action on drug prices. Axios. Retrieved from https://www.axios.com/vitals-2403219901.html.
[7] Kaplan, Shelia, and Katie Thomas (2017, June 20). Draft Order on Drug Prices Proposes Easing Regulations. The New York Times. Retrieved from https://www.nytimes.com/2017/06/20/health/draft-order-on-drug-prices-proposes-easing-regulations.html.

340B Program: Don't throw the baby out with the bathwater

By: Brandon M. Macsata, CEO, ADAP Advocacy Association

The pharmaceutical industry and other interest groups have lobbied Congress to "reform" the 340B Drug Pricing Program, which they claim is riddled with waste, fraud, and abuse. Abound are damaging audits and reports that certainly back up the claim, except this over-generalization can be dangerous. Whereas hospitals are the program's primary participating vendors, there are many other smaller entities that also leverage the discounts on prescription drugs to assist their clients. No better example exists than the Ryan White covered entities, including Ryan White clinics, State AIDS Drug Assistance Programs (ADAPs), and other safety net providers.

The Health Resources and Services Administration (HRSA) summarizes the 340B Drug Pricing program as follows:

"The 340B Drug Pricing Program requires drug manufacturers to provide outpatient drugs to eligible health care organizations/covered entities at significantly reduced prices. The 340B Program enables covered entities to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Eligible health care organizations/covered entities are defined in statute and include HRSA-supported health centers and look-alikes, Ryan White clinics and State AIDS Drug Assistance programs, Medicare/Medicaid Disproportionate Share Hospitals, children’s hospitals, and other safety net providers."[1]

It is understandable why the drug manufacturers — most of which are required by law to to provide significant discounts (20-50%) off drug pricing— would be concerned about the growth of the program. Total sales under the program increased from $1.1 billion in 1997 to more than $7 billion in 2013,[2] and quickly climbing toward $20 billion. There are plenty of shenanigans with hospitals boosting their profits rather than providing supports and services for low-income and uninsured patients.[3] A recent study concluded, “Our findings support the criticism that the 340B program is being converted from one that serves vulnerable patient populations to one that enriches hospitals and their affiliated clinics.”[4]

Some in Congress are also alarmed. Senator Charles E. Grassley (R-IA) is chief among them, arguing a few years back, "Congress needs to know the extent to which the agency believes it lacks the statutory authority to ensure that hospitals use the 340B program to help the uninsured receive affordable prescription drugs. Medicare and private insurance are paying much more for some drugs than the hospitals paid because of the program discount. Congress needs a full picture of how hospitals are using the program and how their uses affect other programs in the health care system.”[5]

Photo Source: Brendan Smialowski/Getty Images

But there is an age-old saying, "Don't throw the baby out with the bathwater."

Earlier this year, Harish Thiagaraj authored a detailed report on how AIDS Service Organizations (ASOs) — some of which are Ryan White covered entities — have served as the poster child for the success of the 340B Drug Pricing Program. Thiagaraj accurately notes that proposed "reforms" to the program would leave such HIV entities largely untouched,[6] but there is no guarantee that harmful changes, or unintended consequences couldn't result from the programmatic reforms targeting large hospitals.

The study concludes:

"Those in the 340B industry realize that the 340B Drug Discount Program runs much more deeply than lower cost prescriptions. It provides treatment for those who are seriously ill. Its savings go towards valuable community services. Its creation was born out of necessity, and program growth directly correlates with better health and outcomes, which the Ryan White clinics’ achievements exemplify."[7]

Thiagaraj's assessment couldn't be more accurate, and we applaud him. Ryan White covered entities participating in the 340B Drug Discount Program have contributed to achieving viral suppression, and more needs to be done. The savings are re-invested back into the clinics, thereby allowing them to offer much needed supports and services to their clients.

Source: Wellpartner

That said, it is important that the integrity of the program is protected.

"The 340B program has been challenged since its inception," summarized Jeffrey R. Lewis, President and Chief Executive Officer at Legacy Health Endowment. "The challenge today is to ensure that the program is operating the way Congress intended. To accomplish this, Legacy Health Endowment will be organizing a national commission to recommend specific ways to ensure the long term solvency of the 340B program, and to determine what changes may need to be made to ensure that the program does not exceed its Congressionally mandated purpose."

Next month this issue will be discussed at the ADAP Advocacy Association's AIDS Drug Assistance Program Regional Summit in Raleigh, North Carolina. "Ryan White & 340B Drug Access" is one of the topics on the agenda with leading policy stakeholders concerned about the future of the program, and potential impact on patients living with HIV/AIDS and other underserved populations.


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[1] Health Resources and Services Administration (2017). 340B Drug Pricing Program. U.S. Department of Health & Human Resources. Retrieved from: http://www.hrsa.gov/opa/index.html. 
[2] Vandervelde, Aaron (November 2014). GROWTH OF THE 340B PROGRAM: PAST TRENDS, FUTURE PROJECTIONS. Berkley Research Group. Retrieved from: http://www.thinkbrg.com/media/publication/524_Vandervelde_340B_GrowthDrivers_WhitePaper_20141202_FINAL.pdf.
[3] Adamopoulos, Helen (2014, October 7). Are hospitals abusing the 340B drug discount program? New study reignites controversy. Becker's Hospital CFO. Retrieved from: http://www.beckershospitalreview.com/finance/are-hospitals-abusing-the-340b-drug-discount-program-new-study-reignites-controversy.html.
[4] Myers, Nan (2016, May 31). Concerns Persist about the 340B Program. Pharmacy Times. Retrieved from: http://www.pharmacytimes.com/news/concerns-persist-about-the-340b-program.
[5] Sen. Charles Grassley (2013, October 13). Grassley: Questions Continue About 340B Discount Drug Program. United States Senate. Retrieved from: https://www.grassley.senate.gov/news/news-releases/grassley-questions-continue-about-340b-discount-drug-program.
[6] Thiagaraj, Harish (2017, January 18). The 340B Drug Pricing Program Success Story: Ryan White HIV Entities," 2017. Wellpartner. Retrieved from: http://wellpartner.com/wp-content/uploads/2017/01/WP_TPL_ThoughtLeadership_RyanWhite.pdf. 
[7] Thiagaraj, Harish (2017, January 18). The 340B Drug Pricing Program Success Story: Ryan White HIV Entities," 2017. Wellpartner. Retrieved from: http://wellpartner.com/wp-content/uploads/2017/01/WP_TPL_ThoughtLeadership_RyanWhite.pdf. 

Pharmaceutical Drug Pricing, According to President Donald J. Trump

By: Marcus J. Hopkins, Blogger

Source: Fox Business News; WATCH CLIP

"I think a lot of industries are going to be coming back. We have to get our drug industry coming back. Our drug industry has been disastrous. They’re leaving left and right. They supply our drugs, but they don't make them here. To a large extent. And the other thing we have to do is create a new bidding procedures for the drug industry because they're getting away with murder. 

Pharma has a lot of lobbies, a lot of lobbyists and a lot of power. And there's very little bidding on drugs. We’re the largest buyer of drugs in the world, and yet we don't bid properly. And were going to start bidding and were going to save billions of dollars over a period of time (National Public Radio, 2017)."

— President Donald J. Trump

Those two paragraphs during then-President-Elect Trump’s first press conference on January 10th, 2017, resulted in the nine biggest pharmaceutical companies (by market cap on the S&P 500) shedding $24.6 billion dollars in just twenty minutes (Shen, 2017). Fox Business Network (FBN) analysts were falling all over themselves to explain what he meant, desperate to make it seem like he wasn’t saying that there needs to be a cap on industry profits and to make it into an issue about taxes, regulations, and the Food and Drug Administration (FDA) approval process (Fox Business Network, 2017). In just two paragraphs, Donald Trump managed to place pharmaceutical companies and lobbyists on the defensive – a position few likely thought they’d be in, after his electoral win in 2016, as market-oriented Republicans have consistently been sympathetic to the industry.

But breaking beyond his rhetoric and getting at the heart of what he’s attempting to say about the way the Federal government in the U.S. deals with pharmaceutical pricing is no simple task, largely because the issue of pricing is cloaked from the public as a result of existing Trade Secrets laws at both the state and Federal levels. These laws allow companies to keep secret how they set the price for their drugs, as well as what and how prices are negotiated with private insurers and government payers, like Medicaid and Ryan White Part B – the AIDS Drug Assistance Program (ADAP). While the Centers for Medicare and Medicaid Services (CMS) are privy to this information, the exact price that each state’s Medicaid program pays is not public information, and releasing that data could result in serious consequences for those programs.

Of the three major public healthcare programs – Medicaid, the Veterans Administration, and Medicare – only the latter is barred by law from negotiating drug prices (Kertscher, 2017). This is a result of a provision inserted into the Medicaid Modernization Act (2003); the act that introduced the controversial Medicare Part D. Medicare Part D is a voluntary insurance program for prescription drugs for people on Medicare that was introduced by former President George W. Bush that has been in place since 2006. It created a market wherein private insurance companies offer various plans (at the county and zip-code-based levels) subsidized by the Federal government. One of the main provisions of the Act states that, “…in order to promote competition,” the Health and Human Services (HHS) Secretary “…may not interfere with the negotiations between drug manufacturers and pharmacies and prescription drug plans.”

There have been various attempts, since 2003, to amend this part of the legislation, as it strictly forbids the Medicare program from using its leverage to essentially force pharmaceutical companies to provide drugs for lower prices. This leverage exists in the form of the 55.3 million Medicare beneficiaries. The 59 state and territorial Medicaid programs have used their numbers – 74.165 million – to successfully negotiate considerably larger rebates from drug manufacturers than the private plans in Medicare Part D “…by a substantial margin” (Department of Health and Human Services, 2015). What differentiates Medicaid from Medicare is that the former is a Federally-funded, state-administered program, where the latter is essentially a model of what other nations refer to as “Universal Coverage.”

Opponents of Medicare drug negotiation argue that allowing the largest government-funded healthcare program to negotiate lower prices will lead pharmaceutical companies to push for higher prices for everyone else (those not enrolled in Medicare). They also argue that the private insurers have greater leverage to negotiate, despite their seeming inability to negotiate better than state governments. Others, still, argue that Medicare negotiation is essentially anti-“Free Market,” and amounts to “price controls” that would serve as a disincentive for drug makers to continue investing in the research and development that produces new drugs (Cubanski & Neuman, 2017).

What makes now-President Trump’s two-paragraph-stock-temblor difficult for pharmaceutical companies – not to mention “Free Market” Republicans – to swallow is that it is entirely heretical to the “small government” line toed by modern Republicans. That a sitting Republican president should dare utter the belief that Big Government should be allowed to use its leverage to “negotiate” (read: “force”) lower drug prices for Medicare is antithetical to everything market-based Republicans and small-government Conservatives have argued for the past forty years. And, let’s be honest: this is the kind of stuff that made and continues to make Trump so troublesome for the Republican Party. He’s unpredictable, often shoots from the hip without a filter, and leaves his mess to be cleaned up by a staff of harried, but loyal adherents who either have to step in and try to translate what he’s said into comprehensible English, or twist themselves into human pretzels to try and convince people that he didn’t actually say what he said, and then, explain what he was supposed to have meant. It’s very unsettling, and often provides political opponents enough artillery to successfully derail his (and thereby their) agenda.

Despite President Trump’s seeming willingness to work with pharmaceutical companies on the issue of FDA approval procedures and regulatory issues (Johnson, 2017), both he and his media surrogates continue to float his argument for Medicare negotiations (Daurat & Olorunnipa, 2017). He also faces considerable opposition from his own party – one that has made no bones about their opposition to the idea.  To their way of thinking, the private sector is better suited to negotiate lower prices, rather than Big Government coming in to tell them what they can charge. His Secretary of Health and Human Services, Tom Price, has, in the past, been consistent in his opposition to Medicare drug negotiations and has repeatedly blocked measures that would allow the HHS to do so. In his confirmation hearings, however, he stated that his “boss will be the President of the United States,” in response to questions on the subject. While not an overt statement in support, it came across as more of a resignation that that’s what Trump wants, despite his own wishes.

Congressional Republicans even have some evidence to back up their claims. The Congressional Budget Office (CBO) has indicated that competition among plan sponsors in Medicare Part D markets has led to lower costs (Congressional Budget Office, 2014). The caveat is that those savings are largely seen only in regions where there are a large number of sponsors – essentially, places where there is a market for their services: areas where retirees have higher incomes. Part of the reason why Medicare Part D has come in at a lower price tag than the CBO initially projected is that enrollment is 12% lower than expected (CBO). Advocates of Medicare negotiation have suggested that this lower enrollment is due to people in smaller markets being unable to afford the monthly expenditure for Part D coverage, as well as the fact that the prices in those smaller markets’ plans simply aren’t low enough to make the plans attractive. Essentially, “Why buy something you can barely afford only to still be unable to afford your medications?”

There’s little question that the coming year is likely to produce many questions about President Trump’s assertion that the drug companies are “getting away with murder,” especially as his positions continue to be amorphous. What this will mean for Medicare has yet to be seen, but you can bet that whatever it is, it will leave critics and proponents, alike, trying to figure out how they got there.


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:

• Congressional Budget Office. (2014, July). Competition and the Cost of Medicare’s Prescription Drug Program. Washington, DC: Congress of the United States: Congressional Budget Office. Retrieved from: https://www.cbo.gov/sites/default/files/113th-congress-2013-2014/reports/45552-PartD.pdf
• Cubanski, J. & Neuman, T. (2017, January 23). Searching for Savings in Medicare Drug Price Negotiations. Menlo Park, CA: The Henry J. Kaiser Family Foundation: Medicare. Retrieved from: http://kff.org/medicare/issue-brief/searching-for-savings-in-medicare-drug-price-negotiations/
• Daurat, C. & Olorunnipa, T. (2017, February 07). Trump Sinks Pharma Stocks on Medicare Drug Price Negotiation. New York, NY: Bloomberg L.P.: Bloomberg: Markets. Retrieved from: https://www.bloomberg.com/news/articles/2017-02-07/trump-backs-medicare-drug-price-negotiating-spicer-says
• Department of Health and Human Services. (2015, April). MEDICAID REBATES FOR BRAND-NAME DRUGS EXCEEDED PART D REBATES BY A SUBSTANTIAL MARGIN [OEI-03-13-00650]. Washington, DC: U.S. Department of Health and Human Services. Retrieved from: https://oig.hhs.gov/oei/reports/oei-03-13-00650.pdf
• Fox Business Network. (2017, January 13). Trump comments a bitter pill to swallow for big pharma. New York, NY: Fox Business Network. Retrieved from: http://video.foxbusiness.com/v/5281705447001/? - sp=show-clips
• Johnson, C.Y. (2017, January 31). Trump calls for lower drug prices, fewer regulations in meeting with pharmaceutical executives. Washington, DC: The Washington Post: Wonkblog. Retrieved from: https://www.washingtonpost.com/news/wonk/wp/2017/01/31/trump-calls-for-lower-drug-prices-fewer-regulations-in-meeting-with-pharmaceutical-executives/
• Kertscher, T. (2017, January 17). Tammy Baldwin: Federal government prohibited 'from negotiating lower prescription drug prices'. Washington, DC: PolitiFact: Wisconsin. Retrieved from: http://www.politifact.com/wisconsin/statements/2017/jan/17/tammy-baldwin/tammy-baldwin-federal-government-prohibited-negoti/
• National Public Radio. (2017, January 11). Donald Trump's Press Conference, Annotated. Washington, DC: National Public Radio: Politics. Retrieved from: http://www.npr.org/2017/01/11/509137239/watch-live-trump-holds-first-press-conference-as-president-elect
• Shen, L. (2017, January 11). Big Pharma Lost $24.6 Billion in 20 Minutes During Donald Trump’s Press Conference. New York, NY: Time, Inc.: Fortune: Market Intelligence. Retrieved from: http://fortune.com/2017/01/11/donald-trump-press-conference-biopharma-stocks/