Navigating the current healthcare legislative landscape

In the ever-evolving landscape of healthcare policy, staying informed about legislative changes is crucial for healthcare providers. Cencora is committed to keeping our customers informed about government and legislative actions that impact our collective ability to enable patient access to the life-changing care that they depend on. This article discusses need-to-know updates on the Inflation Reduction Act’s Medicare Drug Price Negotiation Program (IRA MDPNP) and the One Big Beautiful Bill Act (OBBBA).

The Inflation Reduction Act's Medicare Drug Price Negotiation Program

For the first time, the Inflation Reduction Act (IRA) provides Medicare the ability to directly negotiate maximum fair prices (MFP) of certain high expenditure, single source drugs without generic or biosimilar competition, through the Medicare Drug Price Negotiation Program. The first round of MFPs for ten selected Part D drugs go into effect on January 1, 2026.

Ahead of January 1, the Centers for Medicare & Medicaid Services (CMS) is establishing the Medicare Transaction Facilitator (MTF) as a core component of implementing the IRA MDPNP. The MTF will play a central role in implementing the IRA MDPNP by providing the operational infrastructure and logistical support to facilitate MFP effectuation.

The MTF will consist of two modules: the MTF Data Module (MTF DM) and the MTF Payment Module (MTF PM). The MTF DM will facilitate the exchange of data to help manufacturers identify and provide MFP refund payments on eligible claims. On the other hand, the MTF PM will offer an optional service to assist manufacturers in transferring MFP refund payments to dispensing entities.

MTF enrollment

Enrollment in the MTF DM is required for dispensing entities as stipulated in their Part D sponsors' network participation agreements. While enrollment is necessary for participation in the IRA MDPNP, it does not obligate the dispensing of MFP medications. Although there is no specific enrollment deadline, CMS recommends that pharmacies and other dispensing entities enroll as soon as they are prepared to ensure readiness for MFP effectuation on January 1.¹ CMS has released several resources to assist in the enrollment process, including a user guide, FAQ overview, and a step-by-step enrollment video. Dispensing entities can also reach out to the CMS Help Desk for any inquiries they may have.

The One Big Beautiful Bill Act (H.R. 1)*

The One Big Beautiful Bill Act (OBBBA), enacted on July 4, 2025, is a federal budget reconciliation package aimed at reshaping federal spending, reducing the deficit, and reforming major entitlement programs.2 We are collaborating with trade associations such as the Healthcare Leadership Council (HLC) and the Healthcare Distribution Alliance (HDA) to assess OBBBA’s health policy implications, in addition to collaborating with our internal subject matter experts to assess the total impact of OBBBA’s health policy provisions on Cencora and our customers.

While OBBBA primarily focuses on tax cuts, border security, fossil-fuel-friendly energy initiatives, and boosting domestic production, there are several healthcare-specific provisions that stakeholders should be aware of. Key aspects include:

• A gradual reduction of the maximum provider tax rate from 6% to 3.5% for states that have expanded Medicaid, beginning in 2028
• A temporary increase in Medicare payments to physicians and other clinicians of 2.5% for services provided between January 1, 2026, and January 1, 2027
• Exemption of all orphan-only drugs from IRA price controls, regardless of whether they treat one or multiple rare diseases, and specification that the countdown to negotiation eligibility does not begin until a drug is approved for non-orphan use
• Creation of a $50 billion fund to provide relief to rural hospitals adversely affected by Medicaid reductions, appropriated over five years from 2028 to 2032
• Prohibition of state Medicaid programs from covering individuals unlawfully present in the U.S., except for certain emergency services, based on new mandates for citizenship, immigration status, and work verification

It is also essential to note that certain topics were not addressed in the final OBBBA package. These include provisions related to pharmacy benefit manager (PBM) reform, such as spread pricing and mandatory NADAC reporting, as well as the codification of the President’s executive order seeking Most Favored Nation (MFN) status for drug pricing.

*While Cencora is committed to supporting our customers in understanding OBBBA’s health policy provisions, we cannot make any statements or provide guidance assessing the impact of tax provisions included in OBBBA. 

As both the healthcare and legislative landscape continues to unfold, Cencora’s commitment to advocating for our customers remains steadfast. We will continue to provide proactive perspectives and strive to remain a reliable resource for our customers, monitoring and proactively shaping congressional and administrative activity, providing updates on implications, and sharing our expertise to shape public policy in support our customers and their patients.

This article is based on a recent Q&A conversation between Lisa Harrison, SVP & President, Specialty Distribution and Solutions at Cencora, and Beth Mitchell, VP, U.S. Public Policy and Advocacy at Cencora.
 
Sources

1.    https://www.cms.gov/files/document/pharmacy-and-dispensing-entity-mtf-faq.pdf 
2.    https://www.congress.gov/bill/119th-congress/house-bill/1/text 
3.    https://www.cbo.gov/publication/61570