Inflation Reduction Act, Healthcare Reform, and General Developments

CMS REMOVES THREE 2026 DRUGS FROM SELECTED DRUG STATUS

In a memorandum dated November 25, 2025, and addressed to Medicare Advantage & Prescription Drug Plan Sponsors, the Centers for Medicare & Medicaid Services (CMS) stated that three of the 10 drugs selected for price negotiation for Initial Price Applicability Year 2026 will exit selected drug status, effective January 1, 2027. CMS explained that the change results from the agency determining that a generic or biosimilar “is being bona fide marketed.”

Sources: PoliticoPro, InsideHealthPolicy, Pink Sheet.

Medicaid Drug Rebate Program (MDRP)

No developments to report.

340B Program

340B REBATE MODEL DEVELOPMENTS

Manufacturer litigation regarding the 340B rebate model continues at the appellate level. Meanwhile, hospital groups brought separate litigation on December 1, 2025, seeking to prohibit the Health Resources & Services Administration (HRSA) from implementing the rebate model.

Sources: BloombergLaw, Law360, InsideHealthPolicy, StatNews (first, second), 340B Report (first, second, third).

HRSA conducted a webinar regarding the rebate model on December 4, 2025, and later posted a recording.

Source: 340B Report.

Meanwhile, a study conducted by a private analytics company concluded that “our findings do not support covered entities’ stated concern regarding interest costs associated with the rebate model: estimated interest costs are small, even under conservative assumptions and extended timelines for rebate payments.”

Source: Pink Sheet.

MANUFACTURER CHALLENGES TO STATE 340B LAWS CONTINUE

Drug manufacturer litigation challenging the 340B laws enacted by various states continues.

Sources: 340B Report (first, second, third, fourth, fifth).

Medicare Part B 

No developments to report.

Medicare Part D

CMS MAKES $16 BILLION RECONCILIATION PAYMENT TO PLANS

The Inflation Reduction Act (IRA) made significant changes to the Part D benefit, such as reallocating financial burdens among CMS, plans, beneficiaries, and manufacturers. CMS has now made its reconciliation payment to plans for 2024, which is higher than in prior years.

Source: StatNews.

State Law Developments

DRUG DISTRIBUTOR CHALLENGE TO CONNECTICUT PRICE CAP LAW CONTINUES

Litigation challenging Connecticut’s price cap law continues. We discussed the litigation in issue No. 57 of this digest.

Source: Law360.