This week is such a kick in the pants with it getting dark so early. I’ve become like a cat chasing the daylight from room to room, ending my day on a swivel club chair that catches the very last rays of the setting sun. Have laptop, will travel.

Shoe Drop. Late yesterday afternoon, the Center for Medicare & Medicaid Innovation (CMMI) announced a model that would introduce Most Favored Nation (MFN) pricing to Medicaid. It’s called the Generous Model. I’ve written and deleted 3 different things so I’ll just leave it here for now. They all fell into the “if you don’t have anything nice to say” category.

Show, Don’t Tell. Late last week, the Health Resources and Services Administration (HRSA) approved eight manufacturers to run 340B rebate models on nine drugs starting Jan. 1, 2026. This means 340B-covered entities will buy at wholesale list price, and get reimbursed later to the 340B ceiling price based on claims data.

This is likely a trial balloon for moving more 340B purchasing to a rebate model; it just became more urgent because of the way Medicare decided to handle claims getting paid at Medicare maximum fair price.

Less Weight, More Volume. Well the GLP-1 deal got done but now I’m just left with a pile of questions. Like how do plans account for it in 2026 if the plan year is about to start? If Medicare beneficiaries are going to pay $50, how do plans account for the difference between ($245 – $50, better than what it was but not as great as not having to cover it)? Presumably demand will be high.  Do plans have to cover it? And what about the loss of rebates to help pay for the drugs?

Both Pfizer and Novo Nordisk currently offer cash prices to self-pay patients that are around $500/month. With this deal, they are banking on volume to make up for the lower price.  

Not the Last. Bausch Health stopped participating in the Medicaid Drug Rebate Program and the 340B discount program. The math must have worked out; it’s one way of avoiding best-price implications. Yes, it likely increases patient assistance program dollars but … using pharma as a bank for everything has it limits, and Bausch tapped out.

Round 2. Amgen filed a new federal suit after the state’s prescription drug affordability board (PDAB) set a $600 per-unit upper payment limit for Enbrel, effective Jan. 1, 2027, reviving constitutional and preemption claims.

No Thanks Needed. The final Medicare Physician Fee Schedule moves forward with Medicare-negotiated Part B drugs not having a published Average Sales Price.

For background, Average Sales Price (ASP) and Medicare Part B negotiated drugs have been a concern since the Inflation Reduction Act passed. Long story short, the new negotiated price (Maximum Fair Price/MFP) will factor into and drag down ASP for everyone, which makes it harder for providers to acquire drugs and get without losing money. The proposed Medicare Physician Fee Schedule came out and doubled down on the idea that ASP has to include MFP. All of the major summaries highlighted this. But if you read further in the proposed rule, it sounds like CMS won’t be publishing ASP for the negotiated drugs. CMS will be publishing the Medicare allowable price which is MFP + 6%.

The final rule did not change anything, but the way it is worded made me laugh out loud. “While we did not make a proposal or solicit comments on the policy statement clarifying that (1) units of selected Part B or Part D drugs sold at the MFP are included in the manufacturer’s ASP and (2) when the Medicare payment limit is based on MFP, the Medicare Part B Drug Payment Limit File will display the MFP-based payment limit, we received comments….(list of things commented on)… We appreciate the thoughtful and robust feedback on this policy statement.” In other words, we didn’t ask for your opinion and you gave it anyway, so whatever.

Need Not Want. Last month, the National Pharmaceutical Council and the University of Colorado published an analysis showing the Center for Medicare & Medicaid Services’ (CMS’s) negotiation playbook gives only fuzzy direction on “unmet medical need,” despite it being a factor that can tilt Medicare’s negotiated price.

The paper found CMS’s approach misses things like quality of life, patient/caregiver burden, societal costs, and administrative hurdles. For patients, the status quo risks prices tied to narrow clinical readouts; for manufacturers, a weak target for value stories; for providers, criteria that don’t reflect real-world burden. CMS’s negotiation guidance and evidence templates need to be updated to better reflect unmet medical need. Value still matters.

Just a reminder, Medicare negotiated prices should be out soon.

Reviewing the Fundamentals – Reality of Prescription Drug Affordability Boards

On Wednesday, as part of its post-election update, the Washington Post’s Health Brief newsletter covered Democrat Abigail Spanberger’s gubernatorial win in Virginia and how it will likely renew interest in creating a PDAB in the state. It has been proposed in the past and vetoed (twice) by Governor Youngkin. The story includes quotes from a state delegate on how the state needs to hold pharmaceutical companies accountable and lower health care costs. The article goes on to say that, according to AARP polling, 84% of adults in the state support creating an affordability board.

I mean this in the best way possible, but an AARP survey that says that people support an affordability board is pointless. The question asked was, “Do you support or oppose creating a prescription drug affordability board to help reduce what people pay for drugs in Virginia? The board would evaluate drug costs and could set limits on how much Virginia payers, including individuals, providers, and state agencies, can pay for certain high-cost prescription medications.”

PDABs do sound like a great idea. An advisory board dedicated to lowering drug costs. Let’s tackle affordability for the state and patients. Who DOESN’T want that? It sounds awesome. The problem, as usual, is reality. And that’s more complicated than saying you want affordability.

Quick baseline: currently 10 states have enacted PDABs. They each must define what affordability means for the state and it’s patients, and then what to do about it. Four states (Colorado, Maryland, Oregon, Minnesota) have decided they will use upper price limits (UPLs), which are price ceilings on what payers will reimburse. UPLs don’t force manufacturers to lower their list price; they just cap what state-regulated plans will pay. ERISA self-funded employers and Medicare aren’t bound by these caps.

Why PDABs/UPLs miss the mark:

1) They’re slow, resource-intensive, and fragmented.
States define “affordability” differently, weigh variables differently, and pick different drug lists—Colorado’s five were not Oregon’s fifteen. Years in, Maryland still reports no savings. That isn’t a moral failing; it’s a system reality.

2) They risk collateral damage in the supply chain.
UPLs assume every upstream actor will accept the capped reimbursement. But wholesalers may not sell if acquisition costs exceed the cap; community pharmacies then can’t stock consistently. Independent pharmacies—already underwater on too many claims—are hit hardest. On the provider side, lowering reimbursement can push “buy-and-bill” practices below water and, because UPL transactions feed into benchmarks, can even drag down Average Sales Price (ASP) nationally, reducing Medicare payments to providers that never got the UPL price. That’s not theoretical—that’s math.

3) They can clash with 340B and safety-net care.
Safety-net providers rely on the spread between acquisition price and commercial reimbursement to fund services. A UPL narrows that spread, which can mean fewer clinics, fewer care-coordination programs, and fewer patients served. Affordability for whom?

4) They can blow back into Medicaid Best Price.
If a state sets a UPL below Medicaid Best Price, that lower number can reset Best Price nationwide, expanding manufacturer liability across all states. Some state legislatures (e.g., Maryland) try to wall this off; not all do. That’s a big federal-state mismatch to roll the dice on.

5) Patients may not save money and it can hurt access
Unless states mandate pass-through, UPL “savings” don’t reliably reach patients. In payer research, 67% said patient OOP would stay the same or increase; 57% expected premiums to rise. That’s the opposite of the promise.

Meanwhile, plans and pharmacy benefit managers (PBMs) can react by tightening utilization management to make up lost rebate revenue. Net: patients could face step edits, prior authorizations, or switches, with little to no out-of-pocket relief.

6) Rare disease patients carry outsized risk.
PDAB processes often allow Quality Adjusted Life Year (QALY) framing and lack clear orphan carve-outs; Washington is the exception. For tiny populations, one or two patients can make or break a therapy’s viability. If sites of care or sole-source specialty pharmacies can’t reconcile acquisition costs with a UPL, patients may be told to “brown-bag” or go without. That’s not an affordability strategy; that’s an access problem.

PDABs chase price when patients live in benefit design. Two people on the same drug pay wildly different amounts depending on coinsurance, deductibles, copay accumulators, and whether any rebates flow to the counter. Even perfect list-price optics won’t fix a benefit that transmits costs to patients by design.

What would actually help (and is within state reach):

• Look at patient affordability. Require pass-through of negotiated savings at the counter and cap OOP on high-cost drugs. Shift from coinsurance to predictable copays.
• Cut friction, not access. Ban non-medical switching, narrow step therapy, and streamline prior authorization, especially in rare diseases.
• Fix PBM incentives. Eliminate clawbacks/spread-pricing and align revenue with service, not list-price-times-rebate games.
• Pool rare-disease risk. Stand up (or join multi-state) reinsurance so a few ultra-high-cost cases don’t distort local markets or trigger blunt price caps.

Bottom line: PDABs/UPLs create headlines, not affordability. If you want a deeper dive, here is a paper I wrote with the Rare Access Action Project.