Small Provision in the One Big Beautiful Bill Reveals the GOP’s Next Health Care Target

Health policy experts, patient advocates, and the news media have understandably focused on the One Big Beautiful Bill’s threat to Medicaid. The budget reconciliation law, passed with slim GOP majorities and exclusive Democratic opposition in July, included numerous reforms to Medicaid eligibility that will likely reduce the number of Medicaid beneficiaries by more than 10 million and decrease federal Medicaid spending by more than $900 billion. 

While academics’ and the media’s focuses have understandably been trained on this backslide of the federal health safety net, a relatively small provision in the bill may preview the GOP’s next target in their rollback of federal health care protections and financing. Buried in the multi-trillion dollar law lies a $5 billion gift to Big Pharma through passage of the ORPHAN Cures Act within the larger reconciliation package. The provision of the law greatly expands which drugs qualify for an exception to Medicare’s negotiation of drug prices, handing $5 billion to Big Pharma at the expense of patients and taxpayers who will on average pay double the price for these drugs than they would with negotiation.

Though small in value compared to the entire law’s value and the reforms to Medicaid specifically, this new law deserves attention both for the its impact on patient access to affordable drugs and its implications for the GOP’s future health agenda to reform or repeal Medicare negotiation of drug prices.

Medicare’s ability to negotiate drug prices is a new phenomenon, as a 19-year ban on negotiation by Medicare lasted until the 2022 passage of the Inflation Reduction Act (IRA). The IRA required Medicare to negotiate maximum prices a set number of the most expensive brand-name drugs each year. 

Under the IRA, the Secretary of Health and Human Services (HHS) must negotiate with drug manufacturers to determine the prices of certain drugs with no generic or biosimilar competition. The IRA, hoping to promote competition and innovation, also exempts certain drugs that treat under-researched diagnoses and thus qualify for the Orphan Drug Act. In determining which of the eligible drugs to negotiate, the Secretary chooses the drugs with the highest cost to Medicare in the year before. The first negotiated prices take effect in 2026.

Passage and implementation of Medicare negotiation of drug pricing faced consistent opposition with every congressional Republican voting against the Inflation Reduction Act, Senate Republicans calling for a repeal of the policy, and pharmaceutical companies spending $372 million in lobbying to oppose its passage. Republicans decried the policy as government price fixing and as a death knell to scientific innovation. 

Unshockingly, upon taking office in early 2025, the unified GOP government considered various reforms to Medicare negotiationwith the goal of weaking or repealing the program before prices took effect. Though various reforms were introduced as part of the reconciliation process, the final bill included only one reform: the ORPHAN Cures Act’s expansion of the orphan drug exception to Medicare negotiation.

Rather than align the exception with the FDA’s special market exclusivity for orphan drugs as the initial Inflation Reduction Act exception does, the new exception allows drugs with multiple orphan indications to still qualify for Medicare negotiation’s orphan exception. In theory, the law protects drugs for less-researched diagnoses; however, in practice the provision serves to protect some of the most expensive, highest revenue drugs.

Because of the law’s passage, negotiation on drugs like Merck’s blockbuster cancer immunotherapy drug Keytruda will now occur later than they would otherwise. Delays on these negotiations can leave taxpayers paying more and seniors missing out on out-of-pocket cost savings of 38 percent to 79 percent. At a time where nearly 30 percent of adults in the United States have difficulty affording their prescriptions, the maintenance of these supra-competitive prices will be the difference between some patients filling their prescriptions and not.

Upon passage of the ORPHAN Cures Act, Merith Basey, executive director of Patients For Affordable Drugs Now, a national grassroots patient advocacy organization that supports Medicare negotiation and represents many patients on impacted drugs like Keytruda, stated, “An overwhelming majority of voters want Congress to do more to lower prescription drug prices, and the ORPHAN Cures Act will do precisely the opposite. This completely unnecessary $5 billion giveaway to the pharmaceutical industry will keep prices high for longer on blockbuster drugs like Keytruda that should be negotiated sooner, weakening Medicare negotiation before it even begins to deliver savings for patients who really need it.”

This giveaway of billions of dollars to Big Pharma demonstrates both the GOP’s willingness to pass their professed policy goals, including attacking Medicare negotiation, into law. Pro-PHrMA elected officials, building on their success with the ORPHAN Cures Act, will have various ways to reduce Medicare negotiation’s impact — they may pursue a piecemeal strategy of continued carve-outs from negotiation, rely on administrative unwillingness to pursue negotiation to the fullest extent, or seek wholesale repeal of Medicare negotiation. Regardless of the future strategy, congressional Republicans’ willingness to carve out blockbuster drugs from Medicare negotiation before the policy was fully implemented demonstrates that Medicare negotiation in its current form is at risk.

Because of these anti-affordability priorities, patients’ costs will remain elevated as the result of Big Pharma’s one-sided price setting, taxpayers will waste unnecessary dollars padding the coffers of some of the most profitable companies in the United States, and Medicare beneficiaries will remain uncertain about whether Medicare negotiation will be the next aspect of the federal health care apparatus on the chopping block. Patients, health policy experts, activists, and legal academics should all heed this warning and expect future action to impact Medicare negotiation.