Health Policy Report – October 21, 2025

White House Announces Drug Pricing Deal with AstraZeneca, EMD Serono
AstraZeneca and EMD Serono became the second and third drugmakers to enter a deal with the Trump administration to offer most favored nation drug pricing under Medicaid. As part of the deal, AstraZeneca will also offer discounts of up to 80% off list prices on direct sales to customers through the TrumpRx.gov website. In return, the drug company will receive a three-year exemption from tariffs.

Shortly after, Merck KGaA’s U.S. arm EMD Serono agreed to offer its in vitro fertilization (IVF) drug portfolio to eligible patients, with an 84% discount for the use of all three therapies in a typical IVF regimen when TrumpRx goes live in 2026. As part of the agreement, EMD Serono will seek expedited FDA review of a new combination therapy called Pergoveris that contains two hormones used in the IVF process.

EMD Serono and AstraZeneca agreed to similar pricing terms that the administration made in its recent deal with Pfizer. However, the drugs highlighted vary slightly. The list of eligible direct to consumer products released by AstraZeneca focus on asthma and chronic disease, while Pfizer’s eligible drugs fall under primary care. EMD Serono’s drugs include injectable IVF therapies.  

While AstraZeneca announced a planned $50 billion in investment, Pfizer announced an additional $70 billion investment in manufacturing and development in the U.S. EMD Serono has yet to announce planned investment, but has entered in an agreement with the Commerce Department that excludes its products and ingredients from Section 232 tariffs if it invests in future manufacturing and research in the U.S.

Additional manufacturers are expected to announce similar agreements with the administration in the coming weeks, aligning with the Trump administration’s objective of tying drug prices to Most Favored Nation (MFN) benchmarks.

To read more, CLICK HERE.

Government Shutdown Continues, Federal Layoffs Begin
The government shutdown has entered its third week, with no immediate resolution in sight. The Senate continues to vote on the House-passed GOP bill to fund the government through November 21, which has repeatedly failed to advance.

While a small group of bipartisan lawmakers has initiated talks to resolve the conflict on enhanced premium tax credits under the Affordable Care Act – an issue at the center of the shutdown – a clear path forward has not come to fruition.

In response, the White House has moved forward with plans to lay off federal government workers. The Trump Administration sent dismissal notices to between 1,100 and 1,200 employees at the Department of Health & Human Services (HHS). However, HHS has since rolled back some of the firings, reinstating hundreds of staff at the Centers for Disease Control and Prevention (CDC).

In addition, U.S. District Judge Susan Illston in San Francisco ordered the Trump Administration to halt the job cuts, stating that she believed evidence would ultimately show the cuts were illegal and in excess of authority.

With fewer staff, it is likely that the timeline for the Medicare Physician Fee Schedule (PFS) and Hospital Outpatient Prospective Payment System (HOPPS) final rules, which are typically released in early November, will be delayed. The rules are currently at the Office of Management (OMB) for review and could be published at any time.

To read more, CLICK HERE.

To read more about layoffs at federal agencies, CLICK HERE.

Senate HELP Committee Announces Hearing on 340B

The Senate Committee on Health, Education, Labor, and Pensions (HELP) has noticed a hearing on the 340B Drug Pricing Program for Thursday, October 23.

The hearing is widely expected to revisit ongoing concerns with the program, as Senate HELP Chair Bill Cassidy, M.D. (R-LA) has long called for reform. In 2023, he began an investigation of the 340B program in the wake of multiple reports that certain 340B-covered entities were generating mass profits without disclosing whether 340B revenue was being reinvested in patient care. Earlier this year, the investigation’s findings revealed that two hospitals had generated hundreds of millions of dollars in 340B revenue, yet failed to pass the discounts directly to their patients. The hospitals reported using that revenue on “capital improvement projects” and “community benefit programs,” without explaining specific expenses.

In recent months, hospitals and community health centers have been pressing the Health Resources and Services Administration (HRSA) to either delay or abandon implementation of a new pilot program that will allow drug companies to issue after-the-fact rebates to covered entities instead of traditional upfront discounts for 340B drugs.

To read the investigation, CLICK HERE.

To watch the hearing, CLICK HERE.

New Study Illuminates Price Disparity Between HOPDs and ASCs

A new study shows that commercial insurers are seeing substantially higher prices for care that is delivered in a hospital outpatient department (HOPD) as opposed to an ambulatory surgical center.

Among three major commercial payers covering 13 common procedures in 2024, researchers outlined prices 78% higher, or $1,489 higher, in HOPDs compared to ASCs. Medicare prices were $633 (97%) higher.

These payment differentials varied widely across payers. Cigna had the lowest differentials between HOPDs and ASCs ($327), whereas United had the highest ($1,673). Importantly, Cigna kept costs lower by working with fewer hospital outpatient departments—only about 14% of them—while United and BlueCross had much broader hospital networks (around 76%).

These findings suggest that absent government action, large insurers with broader networks will continue to reimburse sites differently.

To read the study, CLICK HERE.

To read more, CLICK HERE.

Colorado Becomes First State in Nation to Cap Drug Prices

The Colorado Prescription Drug Affordability Review Board made Colorado the first state to set a price cap on a prescription drug by placing an upper payment limit (UPL) on how much a patient or insurer will have to pay for the drug Enbrel, which treats rheumatoid arthritis and other autoimmune diseases.

While this decision is intended to save over $30 million in drug spending and increase access to this prescription for Coloradans, it is uncertain whether these promises will hold. The UPL may cause drug companies to stop offering their drugs in Colorado, stop pharmacies from buying the drugs to sell to patients, or stop insurance companies from covering the drugs, all of which will reduce access to prescription drugs in Colorado

Although these price caps represent a historic ruling, the actual impact on patients is unclear. The Network will continue to monitor the situation closely.

To read more, CLICK HERE.