Drugmakers adjust strategies amid US Medicare pricing shifts

Pharmaceutical companies are adjusting their business strategies in response to drug pricing legislation, including the Inflation Reduction Act (IRA) and executive orders regarding most-favored nation pricing. According to a survey of 175 executives, manufacturers are considering raising prices overseas, onshoring production, and shifting investment toward biologics to navigate longer grace periods before price negotiations can occur.

A finalized rule regarding the Trump administration’s drug pricing model, known as GLOBE, may apply to as few as four drugmakers. This reduction follows exemptions for companies that have already signed separate pricing agreements with the administration, including major firms such as Pfizer, Eli Lilly, and Novo Nordisk.

As a result of these exemptions, the Department of Health and Human Services (HHS) has significantly lowered its projected savings. The agency now estimates the program will reduce Medicare Part B spending by approximately $440 million, a sharp decrease from the $11.9 billion originally projected in the proposed rule.