Well being coverage specialists, affected person advocates, and the information media have understandably centered on the One Large Stunning Invoice’s risk to Medicaid. The price range reconciliation legislation, handed with slim GOP majorities and unique Democratic opposition in July, included quite a few reforms to Medicaid eligibility that may doubtless cut back the variety of Medicaid beneficiaries by greater than 10 million and reduce federal Medicaid spending by greater than $900 billion.
Whereas teachers’ and the media’s focuses have understandably been skilled on this backslide of the federal well being security internet, a comparatively small provision within the invoice might preview the GOP’s subsequent goal of their rollback of federal well being care protections and financing. Buried within the multi-trillion greenback legislation lies a $5 billion reward to Large Pharma by passage of the ORPHAN Cures Act throughout the bigger reconciliation package deal. The availability of the legislation drastically expands which medicine qualify for an exception to Medicare’s negotiation of drug costs, handing $5 billion to Large Pharma on the expense of sufferers and taxpayers who will on common pay double the value for these medicine than they’d with negotiation.
Although small in worth in comparison with the total legislation’s worth and the reforms to Medicaid particularly, this new legislation deserves consideration each for the its impression on affected person entry to inexpensive medicine and its implications for the GOP’s future well being agenda to reform or repeal Medicare negotiation of drug costs.
Medicare’s skill to barter drug costs is a brand new phenomenon, as a 19-year ban on negotiation by Medicare lasted till the 2022 passage of the Inflation Discount Act (IRA). The IRA required Medicare to negotiate most costs a set variety of the most costly brand-name medicine every year.
Below the IRA, the Secretary of Well being and Human Companies (HHS) should negotiate with drug producers to find out the costs of sure medicine with no generic or biosimilar competitors. The IRA, hoping to advertise competitors and innovation, additionally exempts sure medicine that deal with under-researched diagnoses and thus qualify for the Orphan Drug Act. In figuring out which of the eligible medicine to barter, the Secretary chooses the medicine with the highest value to Medicare within the yr earlier than. The primary negotiated costs take impact in 2026.
Passage and implementation of Medicare negotiation of drug pricing confronted constant opposition with each congressional Republican voting in opposition to the Inflation Discount Act, Senate Republicans calling for a repeal of the coverage, and pharmaceutical corporations spending $372 million in lobbying to oppose its passage. Republicans decried the coverage as authorities worth fixing and as a dying knell to scientific innovation.
Unshockingly, upon taking workplace in early 2025, the unified GOP authorities thought of varied reforms to Medicare negotiationwith the objective of weaking or repealing this system earlier than costs took impact. Although varied reforms have been launched as a part of the reconciliation course of, the ultimate invoice included just one reform: the ORPHAN Cures Act’s enlargement of the orphan drug exception to Medicare negotiation.
Somewhat than align the exception with the FDA’s particular market exclusivity for orphan medicine because the preliminary Inflation Discount Act exception does, the brand new exception permits medicine with a number of orphan indications to nonetheless qualify for Medicare negotiation’s orphan exception. In principle, the legislation protects medicine for less-researched diagnoses; nevertheless, in apply the availability serves to guard among the costliest, highest income medicine.
Due to the legislation’s passage, negotiation on medicine like Merck’s blockbuster most cancers immunotherapy drug Keytruda will now happen later than they’d in any other case. Delays on these negotiations can go away taxpayers paying extra and seniors lacking out on out-of-pocket value financial savings of 38 % to 79 %. At a time the place practically 30 % of adults in the US have issue affording their prescriptions, the upkeep of those supra-competitive costs would be the distinction between some sufferers filling their prescriptions and never.
Upon passage of the ORPHAN Cures Act, Merith Basey, govt director of Sufferers For Inexpensive Medication Now, a nationwide grassroots affected person advocacy group that helps Medicare negotiation and represents many sufferers on impacted medicine like Keytruda, acknowledged, “An awesome majority of voters need Congress to do extra to decrease prescription drug costs, and the ORPHAN Cures Act will do exactly the alternative. This utterly pointless $5 billion giveaway to the pharmaceutical trade will maintain costs excessive for longer on blockbuster medicine like Keytruda that ought to be negotiated sooner, weakening Medicare negotiation earlier than it even begins to ship financial savings for sufferers who really want it.”
This giveaway of billions of {dollars} to Large Pharma demonstrates each the GOP’s willingness to move their professed coverage objectives, together with attacking Medicare negotiation, into legislation. Professional-PHrMA elected officers, constructing on their success with the ORPHAN Cures Act, can have varied methods to scale back Medicare negotiation’s impression — they could pursue a piecemeal technique of continued carve-outs from negotiation, depend on administrative unwillingness to pursue negotiation to the fullest extent, or search wholesale repeal of Medicare negotiation. Whatever the future technique, congressional Republicans’ willingness to carve out blockbuster medicine from Medicare negotiation earlier than the coverage was absolutely carried out demonstrates that Medicare negotiation in its present kind is in danger.
Due to these anti-affordability priorities, sufferers’ prices will stay elevated as the results of Large Pharma’s one-sided worth setting, taxpayers will waste pointless {dollars} padding the coffers of among the most worthwhile corporations in the US, and Medicare beneficiaries will stay unsure about whether or not Medicare negotiation would be the subsequent facet of the federal well being care equipment on the chopping block. Sufferers, well being coverage specialists, activists, and authorized teachers ought to all heed this warning and count on future motion to impression Medicare negotiation.