What Happens to Medicare Price Negotiations Under Trump?

In 2022, the Biden administration passed the Inflation Reduction Act (IRA), which allowed Medicare to negotiate prescription drug prices for the first time — a reform long sought by progressive Democrats. Under President-elect Trump, the future of the program is less certain.

But if there’s one thing that experts agree on, it’s that whole-cloth repeal of the law won’t be easy.

“I don’t think there’s any upside to Republicans saying they’re going to repeal the IRA, because that means repealing the cap on out-of-pocket [costs], and that is political suicide,” said Douglas Holtz-Eakin, PhD, president of the American Action Forum, a conservative think tank, referring to the key provision of a $2,000 cap on out-of-pocket costs for covered prescription drugs for Medicare enrollees.

However, Andrea Ducas, MPH, vice president of health policy at the left-leaning Center for American Progress, took a different view.

“That program was in the bull’s eye of Project 2025,” she told MedPage Today. “We still have every reason to believe that that is the policy blueprint that a future Trump administration was looking to.” (Despite many of the authors being former Trump officials, the president-elect has repeatedly attempted to distance himself from the policy paper.)

On the other hand, drug price negotiation “enjoys tremendous public support,” she noted. So, to say, “‘Hey seniors … we’re going to take away Medicare’s ability to negotiate prescription drug prices,’ it’s a bad look, particularly when the Trump campaign ran on not touching people’s Medicare.”

In August, the Centers for Medicare & Medicaid Services (CMS) revealed the negotiated prices of the 10 drugs selected for inclusion in the program a year earlier. All were single-source brand-name drugs with no therapeutically equivalent generic or biosimilar competition that were targeted for negotiation based on their total expenditures in the Medicare Part D program — they are costly, widely used, or both.

Asked whether Trump might be as aggressive in trying to curb drug prices in his second term as he was in his first, having not only introduced a “most favored nations” policy, but also drug re-importation, Ducas said, “What you see in President-elect Trump is somebody who reacts in the moment and displays sort of an intensity of interest based on where public sentiment is.”

“He talks all the time about wanting to do something different with healthcare … something that really delivers to the people, but then, repeatedly, he doesn’t come up with anything,” she added.

Stephanie Kennan, of McGuireWoods Consulting in Washington, D.C. and a former senior health policy advisor to Sen. Ron Wyden (D-Ore.), told MedPage Today that the lesson Republicans should have learned from attempting to repeal the Affordable Care Act is that you can’t repeal something without having a plan to replace it with.

In October, the Congressional Budget Office issued a report analyzing a range of drug pricing policy options. The only one that “moved the needle” was Trump’s “most favored nations” policy — the attempt during Trump’s first term to tie U.S. drug prices to those of other industrialized nations. “But Trump said he didn’t want to do that again,” Ducas said.

A video posted to his campaign website last year suggesting that the policy could be resurrected was recently removed, and a spokesperson confirmed that the campaign has no plans to revive the policy.

As for the future of drug price negotiation under the IRA, a determining factor is control of the House. (When Kennan spoke to MedPage Today on Wednesday afternoon, around 30 House races had yet to be called.)

“There’s a lot more chance of being bolder [and] faster if both chambers are controlled by the Republicans,” Kennan said, adding that, even then, achieving consensus across the party could be difficult.

Zachary Baron, JD, of the O’Neill Institute for National and Global Health Law at Georgetown University Law Center in Washington, D.C., agreed that control of the House is an important “outstanding question.”

Given unified control of the House, Senate, and White House, Republicans could pursue either repeal or substantial reforms to the drug price negotiation program.

Even without Congress, Trump could delay implementation of the program or enact measures that are “more conciliatory to the pharmaceutical industry,” which could lead to their own legal challenges, Baron told MedPage Today.

One other early signal of potential plans from the Trump administration will be its posture in defending the negotiation program in court, he pointed out. The O’Neill Institute has been tracking the outcomes of these trials, which, to date, have mostly favored the federal government.

As for other changes to the program, Holtz-Eakin pointed out that because of the secrecy around Medicare’s price negotiation process, Trump could tailor the scheme to his liking, even taking a “most favored nations” approach — benchmarking U.S. prices to international ones. And “we’d never know,” he said.

No Mandate for Repeal

Anthony Wright, executive director for Families USA, a nonprofit based in Washington, D.C., said if Trump has a mandate, it centers around the “unaffordability of staple items” and that includes prescription drugs.

“And so to undo the power of negotiating for the best price for prescription drugs that seniors need would be the opposite of the mandate that he has,” Wright told MedPage Today.

While the threat to many popular patient protections were spelled out in Project 2025, Wright also noted that Trump “actively disavow[ed] and distance[d] himself” from that policy paper, including in relation to prescription drug price negotiating authority.

“I’m not saying that these policies aren’t in danger, I’m saying … he has no mandate [for repeal], and in fact, if anything, he has a mandate to actually do more on prescription drug price negotiation,” Wright said. “President Trump talked about promises kept [in his victory speech] … This is how he can keep that promise, by keeping this policy in place.”

John O’Brien, PharmD, MPH, president and CEO of the National Pharmaceutical Council (NPC), said that “there’s a lot not to like about the IRA’s price-setting program — and still a lot of uncertainty about what it means for patients that I hope the new administration and new Congress looks at.”

“Our research suggests the IRA may delay the launch of new medicines, reduce the number of subsequent indications approved, and limit post-approval research used to establish treatment guidelines, while encouraging insurance plans to limit access,” he told MedPage Today.

Moreover, it’s NPC’s job to produce high-quality evidence to help the next administration understand the laws’ “unintended consequences” and to “protect patient access to innovation,” he said.