US Healthcare Policy in Flux – What We Know & Don’t Know

Building on last year’s themes, ISPOR 2025 underscored ongoing uncertainties and emerging strategic considerations surrounding the implementation of the Inflation Reduction Act (IRA), building influence of state prescription drug affordability boards (PDABs) and rapid and frequent shifts in policy. While foundational concerns, such as transparency around the negotiation process and uncertainties around evidence requirements, persist, new insights highlight the heightened complexity of United States (US) drug pricing policies and reveal potential threats to innovation and market access.

Drug Pricing Negotiations: Navigating Uncertainty and Strategic Evidence Development

Uncertainties in Preparing for CMS Negotiations

Manufacturers preparing for future Centres for Medicare & Medicaid Services (CMS) negotiations remain frustrated with the opaque nature of the process, with reports remaining heavily redacted, making it complicated to understand the key factors influencing negotiated drug prices. Despite a broad evidence base, with CMS reports often comprising hundreds of references including real-world evidence (RWE), the key drivers remain largely elusive.¹ While this opacity diminishes the ability of manufacturers to plan for negotiations, speakers at this year’s conference repeatedly emphasised early and strategic planning and messaging as critical to success:

1. Early Planning: Early planning for negotiations, ideally 2–3 years prior to expected negotiation, is crucial, not only to develop compelling submission dossiers and engage early on with CMS, but also to ensure that the necessary data and analyses will be available in time for inclusion.¹ Since supporting data generally need to be published to be included in dossiers, manufacturers need to plan well in advance to identify which analyses and evidence will be needed to substantiate their submission and plan for publication of these data
2. Evidence Versus Therapeutic Alternatives: Despite uncertainties, emerging insights have identified comparative data against CMS’s choice of therapeutic alternative as potentially one of the most impactful pieces of evidence. Conducting head-to-head trials post-launch, and using initial CMS meetings to build a strong case against the alternative, appear to be key in differentiating treatments.^{1, 2} However, in most cases, it seems unrealistic to expect companies to generate robust, head-to-head comparative data late in the development process. Especially if CMS’s selected therapeutic alternative differs from a company’s expectation, these data are unlikely to be available and companies risk entering the negotiations without the necessary evidence to support their position. To address this, clear guidance on the accepted comparative evidence is needed from CMS, allowing companies to align their evidence generation strategies from the outset to produce the robust data that are expected
3. Tailored Value Narrative: Manufacturers should focus on building a concise, focused narrative that explains why their therapy should not be placed under the ceiling price. Being strategic and critical of the key evidence to build the story, without diluting the narrative with unnecessary background information, is crucial¹

Continuing Uncertainty at the State Level

While manufacturers navigate the lack of transparency surrounding the CMS negotiations, they face similar frustrations at the state level, where PDABs are rapidly taking action, as highlighted in the research presented by Costello Medical at this year’s conference (Poster HPR135). However, there is enormous heterogeneity in the model of each state, including in the selection criteria, legislative frameworks, and implementation approach, making it nearly impossible for manufacturers to plan for evidence submissions. While some boards, like Maryland’s, aim to overengineer their process to improve predictability and transparency, substantial cross-state variability remains, complicating manufacturer’s strategic planning.³

This heterogeneity stems from why PDABs have largely been developed: widespread state frustrations with federal inaction to address drug affordability. However, with IRA price controls being rolled out, it is unknown how these may impact the building influence of PDABs and the rate at which other states adopt their own boards. If more states consider establishing these boards, they will inevitably observe and learn from the strengths and weaknesses of existing boards to inform their legislation. As such, the variability across states is likely to persist, further complicating manufacturers’ abilities to plan their evidence strategies and making it more challenging to develop a cohesive nationwide approach to drug affordability.

Innovation: Navigating Market Shifts

Overall, an unsettling trend related to drug price controls was continuously highlighted at this year’s conference: price controls are discouraging investment in innovation. Industry observations point to delayed launches, reduced indication expansion and exploration, and a slowdown in post-approval research.⁵

Strategies such as accelerated evidence generation, including increased use of generative artificial intelligence, are being explored by small biotech companies to address these challenges. However, price control policies have introduced a concerning threat to innovation and are already having an impact. Some of the speakers at our colleague Kate Hill’s issue panel, “To What Extent Will the IRA Impact Innovation and Access to Rare Disease Treatments – Did the IRA Temporarily Spook Industry or Will it Have a Permanent Influence”, shared how the IRA is affecting orphan drug development, and this uncertainty may lead to future reductions in investments. Another striking point shared during the panel highlighted that science and innovation shouldn’t have to read legislation to determine if it’s worth continued exploration and investment.⁵ However, this is exactly what these policies are at risk of doing. When policies hinder scientific progress, the result is delays, missed opportunities and even the complete halt of therapies in development that could transform patient lives. This disconnect between policy and progress puts innovation at risk and leaves patients to suffer the most.

Adding to this concern, manufacturers could opt to delay launches in the US, choosing to first roll out multiple indications in international markets before tackling the US.⁵ This threatens maintenance of a world-leading healthcare system in the US and delays patient access to therapies, ultimately turning away from patient-centric care and restricting patients from accessing the level of care available elsewhere globally.

Broader Policy Outlook and Adapting to a Transforming Landscape

Most of the sessions, speakers and research discussed the US policies and regulation that we already were aware of, even if it is too early to truly understand the full effects of the actions. However, the Trump administration’s executive orders on international reference pricing/most favoured nation status, landing just as the conference started, were a timely demonstration of the most significant challenge facing the pharmaceutical industry over the coming years: the unpredictability of future regulation and the inability to prepare for it.

There has arguably been more US policy change in the last three years alone than in the prior 20+ years; while the industry could once count on stability and a general understanding of the incentives and processes in developing drugs, things are changing so quickly that it becomes impossible to determine exactly how much evidence will be sufficient to bring a drug to market or gain reimbursement, and what the relevant steps in the market access workflow will look like. Furthermore, the increasingly muscular but fragmented state-level authorities mean that the already-complicated process for reimbursement becomes more convoluted; it effectively begins to seem like there are dozens of mini-markets for companies to fight for continued reimbursement for drugs that have been on the market for years. More concerningly for manufacturers, nothing is stopping more states from developing PDABs, especially if they feel that the early adopters are yielding favourable budgetary results. It’s not out of the question that manufacturers would prefer someday to have one, overarching US-based HTA system than dealing with 50 separate state-level negotiations.

The interplay between CMS negotiations at the federal level, state PDAB activities, and uncertainty around rapid policy changes means manufacturers must do their best at pushing forward with innovation while remaining adaptable to the rising price pressures. It remains to be seen, however, how successfully these companies are able to pull this off.