Inflation Reduction Act, Healthcare Reform, and General Developments
TRUMP COMBINES MFN POLICY WITH THREATS OF TARIFFS
During a Cabinet meeting on August 26, 2025, President Trump once again touted his most favored nation (MFN) policy, stating that “we’re going to have the biggest price event” and adding that it will happen “in a matter of a very short period of time.” He also focused on increasing prices for pharmaceuticals outside the US, noting that “we’re all set with the countries, and we’re all set with the companies.” Robert F. Kennedy Jr., Secretary of Health and Human Services, responded that “we are deep into … most favored nation status negotiations with 14 companies.”
Secretary Kennedy added that adding that Howard Lutnick, the Secretary of Commerce, “is a breath of fresh air, and I think he’s going to help us get across the finish line with the leverage that we have from there.” Expanding on this notion of leverage, Secretary Lutnick explained that “the combination of Bobby’s MFN and the [Section] 232 [tariff investigation regarding] pharmaceuticals, which we launched together, when you put those two together, it really gives Bobby the tools to go execute [President Trump’s] plan.” It is unclear how the ongoing litigation challenging tariffs may affect tariffs on pharmaceuticals.
Sources: InsideHealthPolicy, Roll Call, The Washington Post, InsideHealthPolicy, Law360.
LAWSUITS CHALLENGING THE IRA CONTINUE
Drug manufacturer litigation against the drug pricing negotiation program established under the Inflation Reduction Act (IRA) continues, with the US Court of Appeals for the Third Circuit affirming a district court ruling that was unfavorable for the manufacturer plaintiffs.
Sources: PoliticoPro, InsideHealthPolicy.
IRA POLICY DISCUSSIONS CONTINUE
Stakeholders continue to discuss how the implementation of the IRA’s maximum fair price requirement, which will apply to the first 10 selected drugs beginning in 2026, may affect the pharmaceutical industry.
Source: BloombergLaw.
RECENT SUNSHINE ACT (PHYSICIAN PAYMENT TRANSPARENCY) ENFORCEMENT
The founder, president, and CEO of a medical device manufacturer recently pleaded guilty to making false statements in the company’s “open payments” disclosures to the Centers for Medicare & Medicaid Services (CMS). These disclosures are mandated by federal “Sunshine” laws, which require medical device and pharmaceutical manufacturers to disclose payments they make to physicians and certain other health professionals. This marks the third recent enforcement action in this area.
Medicaid Drug Rebate Program (MDRP)
D.C. DISTRICT COURT UPHOLDS CMS “NEW FORMULATION” DEFINITION
CMS issued a final regulation in 2000 that, among other things, for the first time defined key terms that had been added to the Medicaid statute by the Affordable Care Act in 2010, such as “line extension” and “new formulation.” That portion of the regulation became effective January 1, 2022.
Responding to a challenge brought by a pharmaceutical manufacturer, on August 27, 2025, the US District Court for the District of Columbia upheld the CMS “new formulation” definition.
Source: BloombergLaw.
340B Program
HRSA RELEASES REBATE MODEL FAQS; LITIGATION CONTINUES
After issuing proposed guidance regarding a rebate model pilot program, which we discussed in issue No. 52 of this digest, the Health Resources and Services Administration (HRSA) has published a dedicated FAQ page regarding the topic on its website.
Source: 340B Report.
Meanwhile, litigation regarding 340B rebate models, which we discussed in issues No. 46, No. 47, and No. 50 of this digest, continues at the appellate level, with oral argument before the US Court of Appeals for the D.C. Circuit scheduled for October 23, 2025.
Sources: 340B Report (first, second, third).
COVERED ENTITY LITIGATION AGAINST MEDICARE ADVANTAGE PLANS CONTINUES
Litigation brought by covered entities and discussed in issues No. 49 and No. 52 of this digest continues. The covered entities allege that Medicare advantage plans inappropriately limited reimbursement for drugs purchased at the 340B price. Reportedly, one covered entity has reached a settlement with one Medicare advantage plan.
Source: 340B Report.
MANUFACTURER CHALLENGES TO STATE 340B LAWS CONTINUE
Drug manufacturer litigation challenging the 340B laws enacted by various states continues.
Sources: 340B Report (first, second, third, fourth).
Medicare Part B
No developments to report.
Medicare Part D
No developments to report.
State Law Developments
COLORADO PDAB SEEKS COMMENTS ON FIRST PAYMENT CAP
The Colorado Prescription Drug Affordability Board (PDAB) has identified a drug that it proposes to subject to a payment cap, beginning January 1, 2026. The PDAB is soliciting public comment on the proposed payment cap, which would apply to all health plans in Colorado. To date, no state PDAB has imposed a payment cap.
Sources: BloombergLaw, PinkSheet.
MARYLAND PDAB ASKS FOR PUBLIC COMMENT ON AFFORDABILITY DETERMINATIONS
The Maryland PDAB has identified two drugs that it believes are “unaffordable” and is seeking public comment regarding this determination.
Source: InsideHealthPolicy.
