#medicare-drug-negotiation

#medicare-drug-negotiation

Congress has kept key drug assistance funding at $900.3 million annually since 2014. New enrollments for state programs jumped 30% from 2022 to 2024, in part because states cut off pandemic-era Medicaid assistance. As of January, at least 18 states have pulled back their Ryan White AIDS Drug Assistance Programs, known as ADAPs, in some way.

The IRA requires drugmakers to sell selected patented drugs to the government for its Medicare Parts B & D programs at a stipulated "maximum fair price". If they don't agree to these prices, then they face tax penalties on sales of the drug exceeding their profits from it, or the exclusion of all their drugs from Medicare and Medicaid purchases. This would foreclose access to up to 160 million patients, accounting for around 40% of US prescription drug spending or 20% of global prescription drug spending.

According to one expert at Pitchbook, two core issues are likely to dominate healthcare reform discussions in 2026: rising costs and flaws in Medicare Advantage. Healthcare affordability remains a major systemic issue preventing millions of Americans from accessing care, and Medicare Advantage's risk-adjustment system is "clearly broken," creating incentives that pull excess money into the program, explained Brian Wright, lead analyst for healthcare research at Pitchbook.

For years, Congress has signaled that it wants to crack down on Pharmacy Benefit Managers, the middle men that have come under fire for their vertical integration with insurers and their role in spiking drug costs. This week, it finally happened via the Consolidated Appropriations Act of 2026, promptingemployer groups including the Purchaser Business Group on Health (PBGH) and the ERISA Industry Committee to cheer its passage.