The Trump Sequel: What to Expect on PBMs, 340B, Drug Pricing, and RFK Jr

Last week’s election results will bring a second Trump administration starting January 21, 2025. Apart from abortion, health care topics did not dominate the 2024 campaign, but that doesn’t mean they won’t emerge in the year ahead. Since Trump left office, the Inflation Reduction Act (IRA) has become law, and some of its most important changes start January 1, 2025; notably, beneficiaries will see a $2000 out-of-pocket cap for Medicare Part D spending. This is a costly item, but that hasn’t stopped IRA critics from pushing to unravel Medicare price negotiations that the pharmaceutical industry detests.

Lindsay Bealor Greenleaf, JD, MBA | Image credit: ADVI Health

To gain insight on what to expect in health care policy in the second Trump administration, The American Journal of Managed Care^® (AJMC^®) spoke with Lindsay Bealor Greenleaf, JD, MBA, who is vice president and head of Federal and State Policy for ADVI Health. Greenleaf leads the firm’s legislative and regulatory efforts on market access issues, on behalf of health care clients across pharmaceutical, biotechnology, device, and digital health industries and provider organizations.

Greenleaf discussed a range of topics including prescription drug pricing, pharmacy benefit manager (PBM) reform, the future of the 340B drug discount program, and even the role of antivaccine activist and former presidential candidate turned Trump supporter Robert F. Kennedy Jr, known as RFK Jr. Trump has said he’ll let the Kennedy family member “go wild” in health care areas from drug policy to food safety.

This interview has been edited for clarity.

AJMC: During his first term as president, Donald Trump discussed several ideas for controlling the cost of prescription drugs, including the Most Favored Nation policy, which called for Medicare to pay no more for high-cost, physician-administered drugs than the lowest price charged to similar countries. There have been varying reports on whether this policy will be revived. What do you anticipate happening with this concept?

Greenleaf: This is a very big issue to watch with incoming President Trump. I think it's too soon to tell if this issue is going to reemerge under a second Trump administration. Obviously, this was hugely important to President Trump during his first term. You had the International Pricing Index model released in 2018, which did not come to fruition, but then eventually that morphed into the Most Favored Nation model released as the interim final rule at the end of 2020. This was ultimately blocked in court over some procedural technicalities.

Robert F. Kennedy Jr. | Image credit: Getty Images

It was our belief going into this presidential campaign cycle that this might be something Trump focuses on again, but it wasn't much of a focus during the campaign. There was a video from June 2023 of President Trump saying on Day 1 he would issue an executive order basically repeating the Most Favored Nation model, or something similar to it, and there was a lot of talk on his campaign website about that. After June 2023, we didn't really hear any talking points repeated on the campaign trail. Then, fast forward to October of 2024—a Trump spokesperson told the press that Trump would not be pursuing the Most Favored Nation (MFN) model again. And on that same day, the video from June of 2023 was taken down from the website, along with any mention of the executive order.

We had a lot of concerns about how the MFN model was shaped and the impact that it would have on patient access to physician-administered therapies in Medicare. One interesting new angle to watch is the influence of RFK Jr going forward. Obviously, it's been made very clear that RFK Jr does have and is expected to continue to have an important role with President Trump on health care issues. We don't know the exact shape that will take. We know that there are certain issues that RFK Jr is known for, which are part of this Make America Healthy Again initiative. As I have been looking into RFK Jr’s background, he did mention an op-ed he wrote in The Wall Street Journal that said he would tie drug prices to the prices paid in Europe. It’s not something I've heard him repeat in his interviews as of late, but it is interesting.

At the moment, it seems that international reference pricing is not top of mind, but I think we're all on high alert that it could certainly reappear in some form.

AJMC: Many are curious about the future of the IRA. In the last year, multiple health policy meetings have focused on the nitty gritty of the IRA’s price negotiation features, and the implementation is well under way. At a meeting last spring at Rutgers Business School attended by representatives from pharma, there was some talk about pieces of the IRA being rescinded or at least altered, perhaps as early as the lame duck session, depending on who was elected in November. With Trump being elected again, what are you hearing? Will there be an effort to alter the IRA during the lame duck session, or will it come later?

President Donald J. Trump | Image credit: Official White House photo

Greenleaf: I would be very surprised if anything of note happened on the IRA during lame duck, given Congress's current split—and we do still have President Biden in the White House. However, in the next Congress after President Trump is sworn in, if Republicans do, in fact, win the House as expected, under that scenario where you have a Trump White House and you have a Republican sweep, things could get very interesting with the IRA government negotiation policy.

We certainly hope that they will attempt a full repeal of the negotiation policy, and there are certainly plenty of Republicans that want to do that. The hurdle will be coming up with pay-fors and being able to offset that cost. We don't have an official Congressional Budget Office (CBO) score to point to at the moment. But you can imagine it's probably somewhere in the $200 billion range.

Short of full repeal, you could imagine Republicans pushing some significant changes that would be positive steps, such as passing the Orphan Cures Act, attempting to fix the discrepancy between biologics and small molecules, known as the EPIC Act or the pill penalty fix. (This would remove the IRA discrepancy between biologics, which are protected from price negotiation for 13 years, and small molecule drugs, which only have 9 years of protection before negotiation.)

Another piece is fixing what’s going on with Part B drug reimbursement, what we call the [Average Sales Price] spiral, which the Part B drugs will be subject to under negotiated drug pricing starting in 2028. There are some wonky issues there, where providers, commercial, and Medicaid reimbursement could be very negatively impacted due to the way the negotiated price would be implemented in Medicare.

It gets really complicated, but the gist is there's negative implications for provider reimbursement on commercial Medicaid that Congress could easily fix, which would not have significant [financial impact]. It would also help providers with their current ASP add-on payment for Part B drug reimbursement.

AJMC: The $2000 flat out-of-pocket cap for Medicare Part D is set to go into effect January 1, and that's already been baked into the Medicare plans that are out there for 2025. At a press conference at the American Society of Clinical Oncology’s annual meeting in June, the representatives from pharma endorsed the $2000 cap while calling for repeal of the negotiation elements. So, I presume no changes are expected to the cap at this point?

Greenleaf: I agree; I would be incredibly surprised if Part D redesign is touched in any significant way. The $2000 out-of-pocket cap—it took a very long time to get here. Patients want an out-of-pocket cap. Manufacturers want there to be an out-of-pocket cap. Everybody's been pushing for out-of-pocket cap. So, it would just be a strange place for Congress to look now, although Part D redesign has ended up being much more costly to the federal government than initially contemplated. There are certainly flaws with the structure and design of how Democrats set this up in the IRA; the CBO recently announced in a letter that it had underestimated the cost of redesign by up to $25 billion in just 2025 alone. If you extrapolate that out, that could be an underestimation of roughly $250 billion. That’s a huge underestimation of the cost of federal government. So, there are things about Part D redesign that policy makers are critical of; Republicans are quite critical of the spending from the federal government that is unanticipated. But with all that said, I would very much doubt that touching Part D redesign would be at the top of the list of priorities going into next year. There are other things to focus on: What happens with all that litigation?

In the past, when we've had presidential elections and the administration changes, and there's [ongoing] litigation when the new administration comes in, the lawsuit ends up disappearing because they don't want to defend it. But in those examples, it's because it was over a regulation, and the new administration directed their regulatory agency to basically rescind or repeal the regulation in question. But in this case, given that it's a law; we're trying to figure out what exactly this looks like. So, I just note that the litigation could get even more interesting with Trump in the White House.

AJMC: I want to shift to 340B reform. This is an important issue for many of our readers. Do you see anything happening here, and if so, when?

Greenleaf: Yes, 340B reform is certainly a bipartisan priority for several members in the House and the Senate. But I would also say generally, from a partisan angle, Republicans are typically more excited to work on 340B reforms than the Democrats. So, if we have a Republican sweep of Congress and with Trump in the White House, I think it makes it even more likely that we could get some significant 340B reforms enacted into legislation. With that said, it all kind of varies what that might look like. When we're talking about IRA government negotiation changes, things like that, we're picturing what we refer to as a reconciliation package; when it comes to 340B legislative reforms, it would probably have to be through a different vehicle, where you would have to deal with the filibuster, unlike the reconciliation packages where there is a specific tie to federal funds.

With 340B, it’s not clear if you could maybe make all these changes, so that all remains to be seen what the exact vehicle will be. As a general matter, the prospects for 340B reforms under a Republican-led Congress, with the Republican White House—there’s definitely a higher likelihood of something happening legislatively and then on the regulatory front.

A Trump-led CMS might want to try their Part B drug reimbursement cuts again. In Trump's first term, you'll recall CMS proposed and finalized significant cuts to 340B hospitals with regards to their reimbursement on physician-administered Part B drugs; they went from ASP+6% to ASP-22.5%. And CMS did that through their rulemaking authority under OPPS [Outpatient Prospective Payment System]; they had to do it in a budget-neutral manner, which got interesting. That meant other hospitals’ reimbursement overall went up, while the 340B hospitals’ reimbursement on drugs went down. They justified these cuts, because we all know that 340B hospitals have a significant spread between the price at which they're acquiring the drug and what they're getting reimbursed at ASP+6%. So, CMS did finalize that, but that is another example of something that got struck down in Court. The Supreme Court ruled that those cuts were not lawful, and their reason for that is because CMS did not issue a cost acquisition survey in advance of proposing those cuts.

AJMC: To be clear, the Court did not rule that CMS could not make the cuts; they ruled that CMS did not follow the correct process.

Greenleaf: That’s right. This is a theme for many of these items; there is a procedural mistake. You could imagine, given a second chance, CMS would do the cost survey and could make those cuts. So, that might be something that a Trump-led CMS looks at for 340 B.

AJMC: The Federal Trade Commission has been very active in looking into practices of PBMs, even pursuing litigation. As you noted, litigation between administrations does not always continue. But in watching this summer’s hearing of the House Oversight and Accountability Committee, there was no shortage of bipartisan criticisms of the PBM situation. Is Congress going to be the center of activity in this area?

Greenleaf: Yes, and Congress very well could act during lame duck on PBM reforms. There are various transparency policies throughout various bills out there right now, as well as policies for delinking compensation from a drug’s list price for Medicare. So, transparency, delinking, those are the themes that have significant bipartisan support right now. Those bills could move during lame duck, and then outside of lame duck going into next year and beyond. Having Trump in the White House and having a Republican-controlled Congress means we can certainly expect more PBM reforms to come. I think President Trump could view the OIG [Office of Inspector General] rebate rule as unfinished business. You know, he tried to enact significant PBM reforms using his regulatory authority with that OIG rebate rule, and the Democrats essentially repealed the OIG rebate rule with the Inflation Reduction Act. Trump could finish the fight on that. There is bipartisan support in Congress for PBM reforms, but I would just note that, generally speaking, it's a bigger issue for Republicans than Democrats. So, the fact that Republicans are now in control puts even greater scrutiny on PBMs and increases the likelihood of more things moving legislatively next year.

AJMC: During the first Trump administration there were attempts to repeal the Affordable Care Act (ACA). Although this did not occur, certain pieces did fall away. What kind of activity on the ACA do you expect in a second Trump administration?

Greenleaf: The idea of repealing the ACA is just not realistic. We've been there, done that; it didn't work before, it wouldn't work again. However, changes to the ACA are certainly going to be on the table. For starters, given expected Republican control in Congress and Trump in the White House, the idea of extending the enhanced generosity of the premium tax credits and extending that eligibility that was put in place with previous COVID-19 legislation, imagine all that expires. It's very unlikely that expanded generosity will continue with the new makeup of Congress.

In addition, expect for more oversight into how the income verification process works for those who receive the premium tax credits. There's a Paragon Health Institute report that came out a few months ago that projected that those who would earn between 100% of the federal poverty level and 150%—meaning those folks who qualify for $0 premium plans—the report projected that the number of folks enrolled in ACA plans at that income level exceeds the number of people who actually have that level of income. At the moment, it seems like some folks might be claiming that their income is lower than it actually is in attempt to get the more generous tax credits. The Paragon report has received a lot of attention from Republicans, so that might be something that that gets attention going forward.

AJMC: Medicare Advantage (MA) expanded under the first Trump administration and continues to grow as a share of the program—more than 50% of beneficiaries are enrolled in an MA plan. Are we going to continue to see further expansion of MA? Is the original fee-for-service Medicare going to be eliminated?

Greenleaf: I think it's too soon to tell the fate of Medicare Advantage at this point, I know that generally, Republican talking points and Trump administration talking points discuss strengthening and expanding on the Medicare Advantage program. At the same time, there are a lot of reports showing how Medicare Advantage plans have been really limiting access to needed care and needed treatments for those patients. Patient satisfaction in Medicare Advantage is not what it used to be, so those are competing dynamics going on. We'll see how that plays out.

AJMC: We hear from a lot of community oncologists that they are not big fans of MA.

Greenleaf: It is awful to be a doctor that has to deal with these health plans. We work very closely with oncology practices. The number of staff that they have to hire, the hours they sit on the phone just trying to get prior authorizations for basic things, like a blood test to verify toxicity levels from cancer treatments—just for things that are relatively cheap, like $30. These are horrific examples of the hoops they have to jump through for the most basic things, in addition to the hoops they have to jump through for expensive drugs and other procedures. That message is being heard loud and clear by Congress, and I think Republicans are viewing Medicare Advantage in a different way than they used to.

AJMC: You mentioned RFK Jr and his involvement in the new administration. He’s kind of a wild card, and so I’m curious what you're hearing about him, and what kind of concerns or observations people are making about his potential portfolio.

Greenleaf: The big question is, what exact role will he have? At this point, we don't know. The latest chatter is that he is unlikely to be in some official HHS position. That could change as we hear more. But at least for now, the idea of him being HHS secretary doesn't appear to be the plan. It seems like he would have some kind of informal, but highly significant, advisory role in the White House. I would not be surprised if in the first 100 days, or really soon after inauguration, we get an executive order from President Trump that says “Make American Healthy Again,” and as part of that order, a committee is set up to investigate things that Trump and RFK Jr have talked about, such as the rise in chronic diseases. The panel might investigate this, gather data, come up with a report, and make recommendations to the public health agencies about what they can and should do to make America healthy again—something like that. I could see RFK Jr having a role with that type of panel.