Health Law Scan

Through the issuance of Inauguration Day executive orders, the Trump Administration signaled its apparent intent to tackle drug pricing reforms over the next four years. However, Biden-era policies are likely to limit a comprehensive overhaul of existing reforms in the near term.

Through its passage, the Inflation Reduction Act (IRA) ushered in several reforms directed at rising prescription drug costs, aiming to lower costs for Medicare enrollees and reduce spending by the federal government. Included in these reforms is the establishment of the Medicare Prescription Payment Plan (M3P), a monthly installment plan that allows enrollees to pay back prescription drug costs overtime instead of all at once at the pharmacy. While M3P will reduce monthly out-of-pocket costs for enrollees, it requires plan sponsors to cover all up-front costs until payments are collected. Given the potential for non-payment, Medicare Part D plans would be well advised to prepare and account for potential financial losses.