Trump Medicare drug pricing model may apply to only four companies after exemptions

The Trump administration's rule aimed at cutting hospital drug prices for Medicare patients may only affect four pharmaceutical companies following certain exemptions, according to the finalized rule published on Wednesday. The Centers for Medicare & Medicaid Services plans to waive the requirement for manufacturers that have individually negotiated separate "most favored nation" pricing agreements with the administration to participate in the price-setting model known as GLOBE.

If this exemption holds true, the model would apply to only four drugmakers, as indicated by a footnote in the rule, which does not disclose the names of these companies. The finalized rule also significantly reduced the government's projected savings from the model. The Department of Health and Human Services now estimates the program will reduce Medicare Part B spending by approximately $440 million over the model period, compared to the initial projection of around $11.9 billion.

However, the reasons behind this reduction in projected savings were not disclosed by HHS. President Trump has signed agreements with over two dozen drugmakers, including some of the world's largest pharmaceutical companies such as Pfizer, Eli Lilly, and Novo Nordisk, starting in the previous year. According to the White House Council of Economic Advisers, the drug pricing initiative could save state governments $27.6 billion and the federal government $36.6 billion over the next decade.