Trump signs bill delaying Medicare price cuts on top-selling drugs

Two provisions in the One Big Beautiful Bill Act, signed by President Trump in July 2025, narrowed the Medicare drug-price-negotiation program that Congress created under the 2022 Inflation Reduction Act. The first provision changes when a drug becomes eligible for negotiation: for a medicine first approved to treat a single rare ("orphan") disease but later approved for wider use, the negotiation clock now starts at the later approval. Merck's Keytruda — first approved in 2014 for advanced melanoma and in 2015 for lung cancer, with $17.9 billion in 2024 U.S. sales — has its negotiation delayed at least a year, from 2026 to 2027. The second provision entirely exempts drugs approved for several orphan diseases but not for common conditions, which covers Johnson & Johnson's multiple-myeloma treatment Darzalex, estimated at about $5.6 billion in gross Medicare spending in 2024.

The Congressional Budget Office estimated the carve-outs will cost Medicare at least $5 billion in missed savings over ten years, and said it expects to revise that figure upward because its analysis omitted drugs such as Keytruda. For drugs administered in a doctor's office, like Keytruda, Medicare patients are responsible for 20 percent of the higher, non-negotiated price unless they have supplemental insurance. Other drugs that lose negotiation eligibility under the new rules include Bristol-Myers Squibb's cancer drugs Opdivo (about $4.7 billion in 2024 Medicare spending) and Yervoy (about $993 million), and AbbVie's blood-cancer pill Venclexta (about $814 million).

Dozens of companies — including Merck and AstraZeneca — and the industry groups PhRMA and the Biotechnology Innovation Organization lobbied lawmakers on the provisions in the first half of 2025, according to OpenSecrets data cited by the Journal. Merck called the change a benefit to patients with hard-to-treat rare diseases, AbbVie's chief executive called it "a good policy change where innovation is being rewarded," and a Leerink analyst said it encourages companies to seek cheaper, small-population approvals first. Critics disagreed: health economist Anna Kaltenboeck called it "a big win for the pharma companies, not necessarily for patients," and Senator Ron Wyden of Oregon called it a "Big Pharma Bailout" funded by the bill's Medicaid cuts.