Radar on Drug Benefits

HHS secretary Robert F. Kennedy Jr. on April 25 revealed that 35 states signed up for CMS’s Cell and Gene Therapy (CGT) Access Model, Endpoints reported. The CGT model is set to launch this year and will include two high-cost sickle cell disease gene therapies that were approved in December 2023: Casgevy (exagamglogene autotemcel), and Bluebird Bio Inc., the manufacturer of Lyfgenia (lovotibeglogene autotemcel). Vertex Pharmaceuticals Inc. and CRIPSR Therapeutics, the manufacturers of Casgevy, and Bluebird Bio Inc., the manufacturer of Lyfgenia, both agreed in December to participate in the model and strike outcomes-based agreements with CMS. Kennedy said that the number of states participating in the voluntary model was “unprecedented” and added it was a “real win-win” for states and sickle cell patients. The Trump administration in March canceled other CMS models, including the Medicare $2 Drug List that the Biden administration had proposed.  

A judge in Mississippi placed a temporary restraining order on CVS Health Corp., GoodRx and Inside Rx, stopping them from forcing independent pharmacies to accept drug discount cards, the Magnolia Tribune reported. Mississippi Attorney General Lynn Fitch (R) said in a statement that “for years Mississippi’s independent pharmacies have been forced to take artificially low reimbursements because the PBMs have used their influence and leverage to effectively force non-negotiable contracts on them.” Inside Rx, a drug discount company, told the Magnolia Tribune that the allegations “are false” and said pharmacies are not required to accept the Inside Rx discount card.  

Arkansas Gov. Sarah Huckabee Sanders (R) on April 16 signed into law a bill that made the state the first to prohibit PBMs from owning or operating pharmacies. Benefits experts and trade groups tell AIS Health, a division of MMIT, that the legislation could have a significant impact on the PBM industry and potentially expand to other states — although they expect the major PBMs to fight back with lawsuits.  

If the law goes into effect on Jan. 1, 2026, as intended, PBMs would be forced to divest the retail, mail-order and specialty pharmacies they own in Arkansas if they want to continue doing business as PBMs there. Even if a PBM’s mail order or specialty pharmacy is in another state, it could not deliver prescriptions to Arkansas or care for patients in the state. The legislation, HB1150, would primarily affect the Big Three PBMs of CVS Health Corp.’s Caremark, UnitedHealth Group’s Optum Rx, and The Cigna Group’s Express Scripts, which collectively process 80% of total U.S. prescriptions and have significant pharmacy assets in Arkansas. 

Major PBMs are warning that a recently passed law in Arkansas that bans them from owning pharmacies could have unintended consequences and hurt medication access for underserved people, including those who have chronic conditions and those in rural areas. The legislation, HB1150, declares that PBMs starting on Jan. 1, 2026, will not be able to own or operate retail, mail-order or specialty pharmacies in Arkansas, which is the first state to adopt such a mandate. 

Patrick Conway, M.D., CEO of UnitedHealth Group’s Optum Rx PBM, told analysts on an April 17 earnings call that the legislation “concerns us significantly” and said that “we’re honestly not sure what problem they’re trying to solve.”  

A recent executive order from President Donald Trump laid out a host of directives with the goal of lowering drug prices and increasing transparency from PBMs. But experts tell AIS Health that the PBM-related goals are not yet very clear. 

The April 15 order notes the first Trump administration’s efforts, such as drug price transparency rules, encouraging development of generic and biosimilar drugs, and requiring that “government-mandated discounts” are passed through to patients. Trump then said that former President Joe Biden’s administration “reversed, walked back, or neglected many of these initiatives” and signed the “misnamed” Inflation Reduction Act (IRA) into law. While the executive order said the Medicare Drug Price Negotiation Program has a “commendable goal” of reducing Medicare drug prices, “its administratively complex and expensive regime has thus far produced much lower savings than projected.” 

With a new executive order on prescription drug prices, President Donald Trump directed HHS to extend the period in which new-to-market small molecule drugs are exempt from Medicare price negotiation, a policy change that pharmaceutical companies have long supported.

The Medicare Drug Price Negotiation Program, which is part of the Inflation Reduction Act, allows the federal government to negotiate the prices of select drugs if they are brand-name medications or biological products without generic or biosimilar equivalents. Drugs subject to negotiation also must have been on the market seven years (for small molecule drugs) or 11 years (for biologics) after FDA approval.