On April 15, 2025, President Trump issued an Executive Order instructing federal agencies to implement a variety of drug pricing reforms. The Executive Order addresses drug pricing from several different angles, including pharmacy benefit manager (“PBM”) competition and transparency, Medicare and Medicaid drug pricing, international importation, and drug manufacturer competition (the “Executive Order”).

The Executive Order, which is the first significant action taken by the current Administration to address drug prices, echoes initiatives and policy statements announced during the first Trump Administration. However, most of the drug pricing reforms announced during the first Administration were never fully implemented. It is unclear how many of the proposals in this Executive Order will ultimately be implemented, but it does provide the clearest outline yet of the Administration’s policy priorities regarding drug prices.

Mintz’s Pharmacy Benefits and PBM Contracting Practice is pleased to present the ‘Fourth Edition: Q1 2025’ of our Mintz IRA Update, a regular publication that delves into developments of the Inflation Reduction Act of 2022 (IRA) and their impact on pharmaceutical supply chain stakeholders.

The PBM Policy and Legislative Update — Winter 2025 edition builds upon prior PBM Policy and Legislative Updates and summarizes activity from October through December (2024) that affects the PBM industry. It highlights (i) federal activities, (ii) state activities, and (iii) other noteworthy events and trends affecting the PBM industry.

On the heels of a nationwide push to regulate pharmacy benefit managers (PBMs), Massachusetts enacted a landmark piece of legislation to increase transparency and oversight within the pharmaceutical supply chain, specifically targeting PBMs. Signed into law by Governor Healey on January 9, 2025, the comprehensive bill, titled “An Act Relative to Pharmaceutical Access, Costs and Transparency” (the Act), introduces a multifaceted approach that aims to reduce prescription drug costs, enhance data transparency, and impose stronger oversight of PBMs and pharmaceutical manufacturers.

In this Special Edition of the PBM Policy and Legislative Update, the Mintz Health team partnered with our Antitrust colleagues to analyze the FTC’s Second Report titled Specialty Generic Drugs: A Growing Profit Center for Vertically Integrated Pharmacy Benefit Managers.

Building upon prior issues and summarizing activity from July through September, the Fall 2024 PBM Update highlights federal legislative activity and oversight, state legislative activity and oversight, and other noteworthy events and trends affecting the PBM industry.

On August 15, 2024, CMS announced the results of the first round of the negotiated prices between CMS and participating drug manufacturers for the 10 selected drugs under the Inflation Reduction Act’s (IRA) Medicare Drug Price Negotiation Program (MPN or Program). In all, reactions to the MPN results varied: Reuters reported that executives from four of the manufacturers selected in the first round of negotiations stated that they do not expect the negotiated prices to significantly impact their businesses; meanwhile, in its press release announcing the maximum fair prices (MFPs), CMS touted an estimated $1.5 billion in Medicare prescription drug out-of-pocket cost savings for Medicare beneficiaries when the negotiated prices go into effect in 2026. 

In ‘Third Edition: Q2 2024’ of the Mintz IRA Update, we cover updates to the Medicare Drug Price Negotiation Program being considered by CMS, developments in litigation challenging the program, the consequences and costs of redesigning the Part D program, opposition to the use of march-in rights to lower drug prices, and the growing use of state prescription drug affordability boards.

On July 9, 2024, the Federal Trade Commission (FTC) Office of Policy Planning released an Interim Staff Report titled Pharmacy Benefit Managers: The Powerful Middlemen Inflating Drug Costs and Squeezing Main Street Pharmacies. The Interim Staff Report reflects the FTC’s work since it began its 6(b) study of PBMs in June 2022.  Mintz’s Health and Antitrust teams actively monitor federal and state regulatory and legislative developments in the PBM space, including those from the FTC. In this Special Edition of the PBM Policy and Legislative Update, the Mintz Health team partnered with our Antitrust colleagues to analyze the Interim Staff Report including Commissioner Melissa Holyoak’s dissenting statement.  We also highlight upcoming Congressional testimony by CEOs of the three largest PBMs, as well as media reports of a forthcoming FTC action related to PBM insulin rebate practices.