By Megan R. Wilson

Listen to this briefing

Was this newsletter forwarded to you? Sign up here to get it in your inbox.

In today’s issue: The latest round of drug pricing deals. … How the Trump administration wants to update payments for accountable care organizations. …. And more.

Welcome to the Health Brief newsletter, everyone. As a programming note: Monday, Dec. 22 will be the last issue of Health Brief in 2025! After that, I’ll be back in your inboxes on Jan. 5. What were your favorite health stories this year? Let me know. You can find me at megan.wilson@washpost.com, or message me securely on Signal at megan.434.

This newsletter is published by WP Intelligence, The Washington Post’s subscription service for professionals that provides business, policy and thought leaders with actionable insights. WP Intelligence operates independently from the Washington Post newsroom. Learn more about WP Intelligence.

President Donald Trump is surrounded by pharmaceutical industry executives while announcing a slew of new drug pricing deals at the White House on Friday. (Demetrius Freeman/The Washington Post)

	The Lead Brief

Nine pharmaceutical companies cut drug pricing deals with the Trump administration today, the largest group of agreements to be announced at one time since the White House began rolling them out in September.

The companies — Amgen, Boehringer Ingelheim, Bristol Myers Squibb, Genentech, Gilead Sciences, GSK, Merck, Novartis and Sanofi — all said they’d be slashing prices on some of their products, including ones used to treat HIV, diabetes, heart disease, the flu, and respiratory illnesses including asthma and COPD.

For example, Bristol Myers Squibb said on Friday it would be offering its blood-thinner Eliquis — which has been subject to Medicare’s price negotiations — to the Medicaid program for free. In July, the company announced that patients could begin purchasing the drug directly from the company at a discount.

It’s part of President Donald Trump’s push for companies to lower the costs of their medications to put them in line with other wealthy countries, also known as most-favored-nation pricing.

“These people really are pioneers,” President Donald Trump said during a White House announcement Friday, as he was surrounded by top health agency officials and executives from the companies involved. “What they’re doing is so great, and, in the end, they do much more business. I think it’s going to even out for them.”

Drug companies will be offering medications directly to Americans at a cash discount through a government-run website, TrumpRx, slated to launch next year. They’ve also promised increased U.S. investments. In exchange, drugmakers are receiving tariff relief and expedited reviews of their medications.

→ As part of Genentech’s deal, the company said in a release, it will “not be subject to future pricing mandates,” thus securing sweeping protection from any future actions by the administration. The specific terms of the agreement, it added, are confidential.

Read Dan Diamond’s report for The Washington Post on the deals, “Drug companies line up to make deals with Trump after initial hesitation.”

Advertisement

As Dan reports, some analysts and outside experts say that the drug pricing arrangements could potentially help some patients, but the overall savings to the health system ultimately may not be that wide-ranging.

“Giving Most Favored Nation prices to Medicaid, particularly for older drugs, likely won’t save that much,” said Craig Garthwaite, director of health care at Northwestern University’s Kellogg School of Management.

Medicaid already secures large discounts from drugmakers for medicines, and some analysts have said that states already get better deals than ones being offered by MFN pricing arrangements.

Separately, some medications that are being offered directly to consumers are still priced at hundreds of dollars per month, which may not help the affordability problem. More than 40 percent of uninsured Americans have trouble paying for their prescriptions.

Merck said it would offer patients discounts of 70 percent off list prices on several drugs — Januvia, Janumet and Janumet XR — that are used to treat diabetes. However, cheaper generic versions of these medications are expected next year.

Earlier this year, Trump wrote letters to 17 large drugmakers, ordering them to, among other things, provide most-favored pricing for new drugs and offer additional discounts for medicines covered by Medicaid.

→ AbbVie, Johnson & Johnson and Regeneron are the only companies that have yet to make a deal. Trump said that Johnson & Johnson would be making an announcement next week. Officials said that the other companies will soon be making an announcement, Dan reported.

Advertisement

Not much is known about the specifics of the 14 deals that drugmakers have made with the administration beyond the small details that accompany the announcements. Each company called out specific drugs in their portfolio that would receive price cuts, but the full scope isn’t known.

Earlier this week, congressional Democrats wrote to four companies — Pfizer, AstraZeneca, Novo Nordisk and Eli Lilly — asking for in-depth answers about the contents of their agreements with the government. The letters probe for information about which drugs are included in the MFN pricing deals, how companies will determine launch prices for new drugs and other details.

Many companies involved in Friday’s announcement said in press releases that the aspects of their agreements with the government are confidential.

	Agency alert

BREAKING: The Centers for Medicare and Medicaid released two pilot initiatives to implement the pricing policies in government-run health programs:

• The Global Benchmark for Efficient Drug Pricing (GLOBE) model governs medications covered by Medicare Part B that are administered by a doctor.
• The Guarding U.S. Medicare Against Rising Drug Costs (GUARD) model concerns products covered in the Part D prescription drug program.

	Executive Health Brief

The Trump administration is planning to launch an updated way to pay doctors and health systems that care for people in traditional Medicare, called the Long-term Enhanced ACO Design (LEAD) model. It encourages providers — throughout what are called accountable care organizations, or ACOs — to work together to try to keep patients healthier over the long term.

→ ACOs receive bonuses for saving Medicare money. If they succeed in delivering care that meets quality goals while keeping costs down, they can share in the savings. If costs rise, in some cases they may have to pay money back.

Why it matters: Medicare spending is a massive driver of the federal budget — costing more than $1 trillion —- and caring for people with chronic or complex conditions accounts for a large share of those costs. CMS said it wants to incentivize providers to care for these more complex patients by better estimating how expensive high-needs patients are likely to be — and setting spending targets that reflect that reality.

The LEAD model — which is a voluntary CMS program — begins in two years to replace the program known as ACO REACH, expiring at the end of 2026. The two models generally share the same overarching goals, but ACO LEAD is larger in both size and scope.

The main expansion points: The LEAD model is set to last for 10 years, the longest time frame CMS has ever tested, according to the agency.

→ It will also experiment with ways to integrate care for people eligible for both Medicare and Medicaid, the government’s health program for lower-income Americans, who often are the most costly to treat. This part will be a limited experiment, with CMS picking two states to partner with “to develop a framework for ACO-Medicaid partnership arrangements.”

“The goal is to create incentives (where none currently exist) for Medicare and Medicaid health care providers to coordinate care and improve outcomes for dually eligible beneficiaries in Original Medicare,” CMS said.

→ An interesting note: In this new model, ACOs can choose to offer patients additional benefits such as “healthy food.” Another optional incentive allows providers to discuss the “possible benefits of hemp products” with patients. This aligns with a recent move by the Trump administration to expand access to hemp-derived CBD, a priority of longtime Trump associate Howard Kessler. Medicare would not cover the cost of these products, however. Also, participation in these incentives is not required for ACOs to join the model.

Size of the program: It’s unclear how large LEAD could be, as it seeks to include more providers than its predecessor. CMS said it wants to include more small, rural and independent providers and health centers. The agency is also focused on having stable benchmarks for providers — which, under current programs, can change from year to year — to provide predictability for participants. 

There are 103 ACOs participating in ACO REACH, according to federal data, with nearly 162,000 providers and organizations that provide care to 2.5 million people. There are 928 health centers, rural health clinics and critical access rural hospitals that participate.

→ In 2023, the ACO REACH program is estimated to have saved the government about $1.6 billion — with the ACOs in the program receiving $948 million in savings payments, according to CMS data. While most of the ACOs earned net savings, 36 of them (or 27 percent) had net losses.

	Tech Check Up

OMB finished reviewing the Drug Enforcement Administration’s rule allowing providers to write prescriptions for controlled substances virtually. The prescribing flexibility began during the coronavirus pandemic, and this would represent the fourth extension. Although the DEA didn’t respond to an inquiry about when the text of the rule would be released, it’s likely to be before the current policy expires Dec. 31.

	Jobs Report

Jeanne Marrazzo has been appointed as the next CEO of the Infectious Diseases Society of America. She’ll take the helm on Jan. 12, succeeding Chris Busky. Marrazzo was the director of the National Institute of Allergy and Infectious Diseases, which is responsible for vaccine research, at the National Institutes of Health for about two years. Marrazzo is suing the Trump administration, alleging she had been illegally fired after raising concerns about the health agency’s leadership.

	What We’re Reading

“How brokers gamed the ACA marketplace, roiling subsidy debate in Congress,” reports The Washington Post’s Paige Winfield Cunningham.

“Hot peppers sent him to the ER. Two years later, a ‘ghost bill’ arrived,” Elisabeth Rosenthal reports for KFF Health News.

ProPublica has created a new tool: “Look Up Where Your Generic Prescription Drugs Were Made: The FDA won’t tell Americans where their generic drugs are made, so ProPublica did it instead.” It’s a part of the outlet’s Rx Roulette series of reporting about FDA oversight of generic drugs.

“A Milestone Pediatric Cancer Bill Fails at the Hands of Bernie. The Vermont senator is holding out for a bigger health care package. Advocates are asking: Is the price worth it?,” the Bullwark’s Sam Stein writes.

“FDA voucher program has become vehicle for political interference in drug review decisions, staffers say,” Lizzy Lawrence reports at STAT.

“HHS planning to overhaul childhood vaccine schedule to recommend fewer shots, source says,” scoop CNN’s Adam Cancryn, Meg Tirrell, Brenda Goodman and Katherine Dillinger.

“Whooping cough cases soar as vaccination rates drop,” report Erika Edwards, Anne Thompson, Jason Kane, Joe Murphy and Mustafa Fattah at NBC News.

“The Most Feared Person at the NIH Is a Vaccine Researcher Plucked From Obscurity,” Katherine J. Wu writes in The Atlantic.

“Patient deaths prompt partial hold for Daiichi-Merck’s global phase 3 ADC program,” Gabrielle Masson reports for Fierce Biotech.