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Pharmacy Benefits and PBM Contracting

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Federal courts continue to uphold the Medicare Drug Price Negotiation Program, with multiple rulings emphasizing the voluntary nature of manufacturer participation. Key legal challenges from AstraZeneca, Boehringer Ingelheim, PhRMA, and others face setbacks as the government remains undefeated.

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States and manufacturers clash over 340B contract pharmacy laws as litigation mounts and courts weigh in on the future of pharmacy access protections.

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The CY 2026 Physician Fee Schedule Proposed Rule (PFS Proposed Rule) introduces significant changes to how drug manufacturers must treat Bona Fide Service Fees (BFSFs) when calculating Average Sales Price (ASP) for Medicare Part B drugs.

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CMS proposes OPPS payment cuts and a drug cost survey, signaling major 340B reimbursement shifts and renewed scrutiny of hospital payment rates.

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CMS finalizes 2026 Medicare Part D changes under the IRA, including new cost limits, subsidy guidance, and updated creditable coverage rules.

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PhRMA’s 2025 agenda pushes back on drug pricing reforms, calling for innovation-friendly policies, 340B reform, and PBM accountability.

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GLP-1 receptor agonists (GLP-1s) such as semaglutide, and dual agonists like tirzepatide, are transforming obesity treatment and reshaping the US health care landscape.

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Senate HELP Committee releases 340B report urging transparency, oversight, and reforms amid uncertainty over future federal legislative action.

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On May 12, 2025, the Centers for Medicare & Medicaid Services (CMS) issued draft guidance for the third cycle of the IRA’s Medicare Drug Price Negotiation Program (Negotiation Program).

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President Trump issues executive orders and letters to curb drug costs, promote MFN pricing, and reform Medicare’s Negotiation Program.

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While the pharmaceutical industry has reacted negatively to President Trump’s May 12 “Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients” Executive Order (Executive Order), manufacturers appear to be leveraging one of Trump’s directives in the Executive Order, accelerating the industry’s shift toward a new model of drug delivery: direct-to-consumer (DTC) programs.

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HRSA launches 340B rebate pilot tied to Medicare drug negotiations, signaling major program shifts amid legal rulings and stakeholder concerns.

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In a significant legal development, a federal judge has temporarily blocked Arkansas from enforcing Act 624. Act 624 prohibits pharmacy benefit managers (PBMs) from owning or operating pharmacies in the state, effectively forcing vertically integrated companies to divest or shut down their Arkansas pharmacy operations. However, on July 28, 2025, U.S. District Judge Brian Miller granted a preliminary injunction to several major PBMs and affiliated entities, halting the law’s implementation pending final resolution of the case.

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Host, Bridgette Keller is joined by Associate, David Gilboa to break down the highlights from our Spring 2025 PBM Policy and Legislative Update. In just five minutes, we cover the most impactful federal and state developments shaping the PBM landscape this season.

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The PBM Policy and Legislative Update — Spring 2025 edition builds upon prior issues and summarizes activity from January through March (2025) that affects the PBM industry. It highlights federal activities, state activities, and other noteworthy events and trends affecting the PBM industry.

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On April 16, 2025, Arkansas enacted Act 624 (the Act), an unprecedented law prohibiting pharmacy benefit managers (PBMs) from owning or operating pharmacies in the state. As we discussed in our May 2025 blog post, the law’s passage has already resulted in market disruptions, and PBMs with vertically integrated business models have cautioned that the law will limit patients’ access to drugs and cost many local jobs. 

Now, two of the nation’s largest PBMs, CVS Health and Cigna’s Express Scripts (ESI), have filed federal lawsuits seeking to block implementation of the Act on the grounds that the Act is unconstitutional, preempted by federal law, and harmful to Arkansans. 

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Read about recent changes made by CMS to the Medicare Drug Price Negotiation Program following the first round of negotiations, manufacturers’ reactions to CMS’s explanations about maximum fair prices, the drugs targeted for the second round of negotiations, and the implications of the Trump administration for the future of the program.

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Read about clarification from CMS for Part D Sponsors implementing the IRA’s Medicare Prescription Payment Plan and Medicare Prescription Drug Inflation Rebate Program policies that took effect on January 1, 2025.

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Read about how a win in the Fifth Circuit and the end of Chevron deference could breathe new life into the Medicare Drug Price Negotiation Program challenges despite continued losses in federal court.

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Read about how Donald Trump’s second presidency and Republican control in the 119th Congress could impact the future of the IRA’s Medicare Drug Price Negotiation Program.

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