The sweeping One Big Beautiful Bill Act, signed into federal law July 4, amended CMS’ drug price negotiations authority that could absolve nearly $5 billion in projected savings, according to the Congressional Budget Office.
CMS gained the authority to negotiate list prices with drugmakers in 2022, and the first 10 negotiated medication prices will take effect Jan. 1, 2026. To be eligible for negotiations, medications must lack generic or biosimilar competition and be on the market for more than 10 years.
FDA-designated “orphan drugs” are exempted from the eligibility criteria. These are therapies for diseases or conditions that affect fewer than 200,000 Americans. With the passage of the new law, the exception expanded to include medications for “one or more rare diseases or conditions.”
The Congressional Budget Office predicts this allowance will avert $4.87 billion in federal savings from the Medicare drug price negotiation program.
“This is essentially giving $5 billion back to the pharmaceutical industry,” Benjamin Rome, MD, PhD, a health policy researcher and primary care physician at Brigham and Women’s Hospital in Boston, told The New York Times. “It’s done in a way that is designed, on its face, to solve the problem of some misaligned incentives, but I don’t think it solves those problems.”
Read more about the law here.
