Key facts
- A Trump administration rule to cut hospital drug prices for Medicare patients may apply to as few as four drugmakers.
- Companies that signed separate "most favored nation" pricing agreements with the administration are exempt from the rule.
- The Department of Health and Human Services now estimates the program will reduce Medicare Part B spending by about $440 million over the model period.
- The proposed rule had projected savings of roughly $11.9 billion.
A rule from the Trump administration designed to lower hospital drug prices for Medicare patients may end up applying to only a handful of companies due to exemptions for those that signed separate pricing agreements with the White House. According to the finalized rule published on Wednesday evening, the Medicare regulator plans to waive the requirement for manufacturers that have already entered into "most favored nation" pricing deals with the administration.
A footnote in the rule indicates that if these exemptions are applied, the number of remaining manufacturers subject to the price-setting model, known as GLOBE, would be as few as four. The rule does not name these specific companies.
The finalized rule also significantly reduced the government's projected savings from the initiative. The Department of Health and Human Services (HHS) now estimates the program will save Medicare Part B approximately $440 million over its duration, a stark contrast to the $11.9 billion in savings projected in the initial proposed rule. HHS did not provide an explanation for this substantial reduction in projected savings.
Starting last year, the Trump administration had signed deals with over two dozen drugmakers, including major pharmaceutical companies like Pfizer, Eli Lilly, and Novo Nordisk. The White House Council of Economic Advisers had previously estimated that this drug pricing initiative could save state governments $27.6 billion and the federal government $36.6 billion over the next decade.