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Trump Says Drug Tariffs Coming President Donald Trump announced that he plans to impose tariffs on pharmaceutical products within the next two weeks. In addition, he issued an executive order directing the Food and Drug Administration (FDA), the Environmental Protection Agency (EPA), and other agencies to facilitate domestic pharmaceutical production and to raise fees for inspecting foreign drug plants. Health plans and pharmacy benefits managers (PBMs) have had a mixed reaction to the imposition of tariffs. CVS Health and Centene see impact that they are studying now, while United Healthcare said it has less concern. Over time, prices will be passed through the supply chain and ultimately to health plans, which will have to pass on costs to employer groups. Government programs would over time recognize cost hikes as well. At the same time, tariffs costs could end up in diminished formularies and higher cost-sharing. The Pharmaceutical Research and Manufacturers

Budget Reconciliation Could Slip Into The Summer A prominent GOP lawmaker told hospital stakeholders today that action on budget reconciliation spending cuts could slip into the summer. Rep. Buddy Carter, R-GA, who chairs a key health subcommittee, indicated the possible slowdown. In addition, hospital leaders exhorted lawmakers to avoid sweeping cuts, which could include work requirements, reduced state matches for the expansion population, fraud reduction, and a per capita cap funding mechanism. They also want the Exchange enhanced subsidies to continue. Insiders say Medicaid per-capita caps and other major structural reforms to the program were being put on the back burner due to moderates’ concerns, but budget hawk conservatives revolted. The committee was readying about $621 billion in Medicaid cuts over ten years. The package included numerous eligibility reforms and restrictions, a reduction in Medicaid expansion match, work requirements, and reducing provider tax allowable rates to 5%. Medicaid spread pricing

International Reference Pricing Bill To Lower Drug Prices Unveiled Two senators, conservative Josh Hawley, R-MO, and progressive Peter Welch, D-VT, have introduced legislation to lower prescription drug prices. The bill would prohibit pharmaceutical companies from selling drugs in the U.S. at prices higher than the international average. This is a form of international reference pricing (IRP). Trump proposed IRP for Medicare Part B drugs under Trump 45 and said he wanted to do so in Medicare Part D as well. The proposal was later pulled back by the Biden administration. Trump has now called for most-favored nation (MFN) pricing for Medicaid. MFN is a form of IRP.  Trump also unveiled a master executive order to reduce drug prices in America. This bill is an important development as it includes a conservative senator. It appears that populism is winning over the GOP, which is usually very friendly to Big Pharma. I

Cigna Reports Good Financial News The Cigna Group reported $1.3 billion in profit for the first quarter of 2025, bucking the trends that have hurt other companies in the insurance industry. Its earnings surpassed Wall Street’s expectations. The company posted a $277 million loss in the prior year quarter. Cigna reported $65.5 billion. That’s up from $57.3 billion for Q1 2024. Cigna faced less pressure around medical costs, reporting a medical loss ratio of 82.2% – up from 79.9% a year ago. Cigna just sold its Medicare assets to Health Care Service Corporation (HCSC). It also announced two new GLP-1 programs. In other news, insurtech Alignment Healthcare exceeded its high-end guidance for the first quarter. The company posted $926.9 million in revenue, up 47.5% year over year. Adjusted gross profit came in at $107.2 million. Alignment still posted a net loss for the quarter at $9.4 million. Additional articles: https://www.fiercehealthcare.com/payers/cigna-bucks-medical-cost-trend-posts-13b-q1-profit

Trump Meets House Leaders On Medicaid Cuts President Donald Trump met with House GOP leaders to discuss Medicaid reductions. Trump said he opposes Medicaid coverage cuts but would support efforts to rein in fraud, waste, and abuse. But Trump has given little word about what would violate his pledge to protect Medicaid. Conservatives want deep cuts and have sent a letter to colleagues saying they want “meaningful reforms” in budget reconciliation. They singled out reducing the Medicaid expansion enhanced reimbursement. Moderates are lining up against reductions, with moderate Don Bacon saying he is leaning against reductions in federal matching funds or provider tax changes. Bacon did say he would support up to $500 million in cuts over the ten-year window. He would support work requirements, more frequent eligibility, and bars on the undocumented. In other news, a poll from healthcare policy group KFF finds that large majorities of Americans, including

Humana Stuns With Great Numbers In Recovery Humana stunned investors with great Q1 recovery numbers, well above what investors had expected. The company beat earnings expectations for the first quarter and reaffirmed its 2025 guidance. Medical costs for the Medicare Advantage (MA)-dominant insurer came in as predicted. Humana had a profit of $1.2 billion, up 68% compared to the first quarter last year. Humana has shed unprofitable MA lives in an effort to get back to a 3% margin by 2027. As important, Humana is seeking to undo a huge concentration of its MA lives in one very large master contract. This will take several years. When Humana’s Star performance was industry-leading, the concentration helped. But that contract dropped dramatically in Star Year 2025, causing a huge loss of quality bonus and rate rebate revenue. Humana still expects a medical loss ratio (MLR) for the full year of between 90.1%

CMS May Further Rein In Prior Authorization Bloomberg reports that the Centers for Medicare and Medicaid Services (CMS) is exploring proposals to further rein in prior authorization (PA) and other utilization management. The exploration is likely on Medicare Advantage (MA). In 2024, CMS introduced sweeping PA restrictions, requiring MA plans largely to follow the traditional program requirements for benefit coverage. When CMS Administrator Dr. Mehmet Oz appeared before the Senate for his confirmation hearings, he bemoaned PA in MA and stated that he wanted to reform it. He specifically mentioned that he wanted to streamline the number of PAs allowed and ensure consistency across plans. Indeed, Bloomberg reports that the aim of the CMS exploration would be to cut the number of medical procedures subject to PA and drive uniformity across plans. Another recent rule also requires electronic PA and CMS is looking at further driving this.   Health plans

Drug Tariffs’ Impact A new study from Fitch says that health plans will not see immediate impact from tariffs on drugs. Providers will bear the brunt upfront and pay higher costs in operations. But over time, providers will pass through the costs to insurers through increased rates. In other news, a dozen states with Democratic attorneys general have filed suit over President Donald Trump’s use of the International Economic Emergency Powers Act (IEEPA) to enact new tariffs. The states argue they have a role due to the fact the tariffs could significantly increase costs for hospitals, manufacturers, and other stakeholders. Additional article: https://insidehealthpolicy.com/daily-news/citing-health-costs-democratic-states-sue-trump-over-tariffs (Some articles may require a subscription.) #tariffs #drugpricing #healthplans #providers https://www.fiercehealthcare.com/payers/fitch-ratings-how-higher-tariffs-could-impact-health-insurers Vendors Strike Deal With GLP-1 Drug Companies More and more weight-loss vendors are striking deals with GLP-1 drug makers, signaling the ability for compounders to create copycats is over now that shortages have been addressed. Hims

Centene Reports Decent Financial News With Some Uncertainty Centene reported relatively sound financial news, but did raise policy issues that could impact the company over time. The uncertainty ties to what will happen in Congress in the next year on Medicaid and the Exchanges. Centene says it believes sweeping Medicaid cuts will not occur and are still pushing hard for extending the premium enhancements in the Exchanges, focusing on swing states and general support for government programs. They do admit some changes, such as work requirements, could occur. The medical loss ratio (MLR) was 87.5%, about the same as the prior year’s same quarter. But expenses could rise. Centene posted $1.3 billion in net income in the first quarter. Total revenues in the first quarter were $46.6 billion, up 15.4% year over year. The company reaffirmed its year-end adjusted guidance. A few complications for Centene could occur. Even modest Medicaid changes

340B Reform May Be Coming Senate HELP Committee Chairman Bill Cassidy, R-LA, on Thursday released a years-long staff investigation of the 340B drug discount program and listed legislative reforms he may push to rein in practices that don’t meet the intent of the program. Cassidy suggests the following: A recent executive order from President Trump orders the conditioning of community health centers’ future grants to ensuring insulin and injectable epinephrine are made available to patients at the 340B discounted price or lower. Additional article: https://www.fiercehealthcare.com/regulatory/sen-cassidy-releases-340b-report-recommending-greater-transparency-oversight-hospitals (Some articles may require a subscription.) #340b #drugpricing #communityhealthcenters #hospitals https://insidehealthpolicy.com/inside-drug-pricing-daily-news/cassidy-unveils-staff-report-underpinning-potential-340b-legislative Molina Reports Mixed Results Rising costs in Medicaid and the health insurance exchanges depressed Molina Healthcare’s first-quarter performance, but the company Beat the Street in terms of earnings and revenue. Molina Healthcare saw net income slip less than 1% to $298 million as revenue grew 12.2% to $11.1 billion in the first quarter. The company reaffirmed