President Donald Trump‘s $3.3 trillion domestic agenda bill, passed by House Republicans on Thursday, includes a significant but little-noticed victory for pharmaceutical companies that will cost taxpayers nearly $5 billion over the next decade.
What Happened: The legislation expands exemptions from Medicare’s drug price negotiation program, allowing manufacturers to keep prices higher for medications treating multiple rare diseases, The New York Times reported. The Congressional Budget Office estimates this change will reduce government savings by $5 billion through 2034.
“This is essentially giving $5 billion back to the pharmaceutical industry,” said Benjamin Rome, a health policy researcher at Brigham and Women’s Hospital in Boston, according to the report. “It’s done in a way that is designed, on its face, to solve the problem of some misaligned incentives, but I don’t think it solves those problems.”
Under current law, costly drugs are exempt from Medicare price negotiations if they treat a single rare disease affecting fewer than 200,000 Americans. Drugmakers complained this policy discouraged them from seeking approval for additional rare disease treatments.
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Why It Matters: This marks the most significant change to the Medicare negotiation program since Democrats created it in 2022, according to the report.
The exemptions will apply to the third negotiation round affecting prices starting in 2028. Several drugs currently facing price cuts would have been spared under the new rules, including Imbruvica and Pomalyst for rare cancers.
The bill passed largely along party lines as part of Trump’s broader legislative package that includes tax cuts, defense spending increases, and significant reductions to federal safety net programs. Democrats criticized the measure as favoring wealthy interests while burdening vulnerable Americans.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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