Trump and Biden administration policies seeking to rein in high prescription drug prices are slated to go into effect in the new year, setting up various overlapping plans with which drug companies must grapple.
Among the programs set to run in 2026 are former President
While each effort seeks to curb drug prices in different ways, it remains to be seen whether greater patient savings are on the way as the drug supply chain reacts to the changes.
“There’s so many irons in the fire,” said Andrew Mulcahy, senior health economist at research organization RAND. “The issue of high drug prices is something multiple administrations in a row have tried to tackle, and some of those efforts are now bumping up against one another.”
“How it all works together—we don’t know,” Mulcahy added. “A big part of it has to do with how drug companies and other stakeholders are going to respond to those policies.”
Prescription drug prices were a key target of both Trump and Biden because the US pays significantly more for medicines than other developed countries. That resulted in pressure on pharmaceutical giants to reduce costs through price negotiations for Medicare drugs and deals to slash Medicaid costs.
The Trump administration proposed two models on Dec. 19 seeking to cut Medicare spending. One would assess rebates for Medicare Part D drugs and the other for Part B drugs, if the prices exceed those paid in economically comparable countries.
Manufacturers are also now cutting prices through their direct-to-consumer plans.
“They’re chipping away,” Geoffrey Joyce, director of health policy at the USC Schaeffer Center, said about the government’s efforts. “I do think patients will start to see some benefits.”
Savings Pending
Among the lowered drug prices set to run Jan. 1 are those from the first round of the Medicare drug price negotiations.
While the Centers for Medicare & Medicaid Services touted an estimated $1.5 billion in savings for beneficiaries when prices go into effect, the true extent of that is unclear due to the government comparing negotiated drug prices to list prices, which Medicare wasn’t originally paying. Drug pricing experts also remain skeptical of savings as net prices and use of the negotiated drugs can change.
“It’s still pretty early to tell what the effects are going to be until maybe the first quarter of next year,” said Kristi Martin, former Medicare chief of staff under the Biden administration, now a health-care director at Camber Collective.
Still, advocacy groups like Patients for Affordable Drugs have been supporting the program, viewing it as the “heart of what is really lowering drug prices,” according to its CEO, Merith Basey.
Meanwhile, Trump’s return to the White House revived an older effort to slash drug costs under Medicaid, namely through the most-favored-nation policy that seeks to tie US drug prices to cheaper ones abroad.
Some of the deals have revealed negotiated prices expected to launch in 2026, such as the $245 price for Novo’s diabetes and obesity drugs Ozempic and Wegovy, and Lilly’s Zepbound and Mounjaro.
It remains to be seen how far the policy will go, given it hasn’t been enacted through legislation, unlike the Biden Inflation Reduction Act’s negotiations.
“The MFN deals could disappear with a new administration, whereas if the IRA were it to change, would have to be modified or repealed,” said Sean Sullivan, professor of pharmacy at the University of Washington.
The extent of savings under most-favored-nation is also unclear, especially as Medicaid already gets steep discounts from drugmakers.
“We need more time and evidence to know if that goal is being met,” said Sarah Emond, CEO of the Institute for Clinical and Economic Review.
Trump has also pressured companies to ramp up direct-to-consumer plans—another pathway where individuals can access discounted drugs without interacting with insurance or pharmacy middlemen. TrumpRx.gov, which is expected to launch in 2026, would connect consumers to drugmakers’ websites to purchase medicines directly from the manufacturer at a reduced cash price.
However, not all individuals would benefit from this platform, as a patient could face more savings under their insurance rather than purchasing directly from the manufacturer, drug pricing experts say.
Those who are fully purchasing drugs through direct-to-consumer are also “probably a limited subset of the commercial segment,” said David Alderman, CEO and president of Molekule Consulting. “Direct-to-consumer is pharma’s yellow brick road to get you to a lower price because they don’t need to have field reps to bring it to market.”
Complex Progress
While government efforts to lower drug prices have escalated, data on health insurance and Part D premiums indicate that pharmaceutical spending is a major driver of increased insurance premiums.
This suggests that “prices on some drugs are down, but overall spending on pharmaceuticals is up,” Sullivan said.
Tracking drug pricing progress can be seen as complicated as several players in the supply chain impact the cost of a drug before it reaches the patient.
Manufacturers initially set the price of their drugs, but costs are then influenced by pharmacy benefit managers and rebates.
“Prescription drug markets in the US are so hard to navigate is because we have all of these different stakeholders involved in these financial arrangements,” Mulcahy said. “It’s really hard to tell who’s on the hook for marking up which price at what point in time.”
To contact the reporter on this story:
To contact the editors responsible for this story:
Learn more about Bloomberg Law or Log In to keep reading:
See Breaking News in Context
Bloomberg Law provides trusted coverage of current events enhanced with legal analysis.
Already a subscriber?
Log in to keep reading or access research tools and resources.