New Act Rolls Back Medicaid Cost-Sharing and Orphan Drug Price Negotiation Rules

The “Protect Patients from Costly Care Act” is essentially a legislative rewind button, specifically targeting two distinct changes made in a previous reconciliation bill. This isn't about introducing new policy; it’s about erasing certain recent updates to healthcare law, specifically impacting Medicaid and how high-cost specialty drugs are handled.

Medicaid: Hitting the Undo Button on Patient Costs

Section 2 of this Act completely wipes out Section 71120 of the prior reconciliation bill. Why should you care about a section number? Because Section 71120 dealt with Medicaid cost-sharing requirements. Medicaid is the safety net for millions of low-income Americans, and cost-sharing refers to things like co-pays or deductibles that patients might have to pay out-of-pocket.

By repealing this section, the Act restores the rules for Medicaid cost-sharing to whatever they were before the reconciliation bill was passed. If the repealed section had been designed to reduce patient costs, this Act removes that protection. Conversely, if the repealed section had increased patient costs, this Act is a win for patients. The bill also rescinds any money that was set aside for implementing the repealed rule, meaning those funds are no longer available for whatever purpose they were originally intended for.

Specialty Drugs: Keeping Rare Disease Treatments Off the Negotiation Table

Section 3 deals with the Drug Price Negotiation Program, which aims to lower the cost of certain expensive prescription drugs. When that program was created, it included rules about which drugs could be excluded from negotiation, specifically “orphan drugs”—medicines developed to treat rare diseases. These drugs are often incredibly expensive due to the small patient pool and high development costs.

The previous reconciliation bill had changed the rules regarding the exclusion of these orphan drugs, possibly subjecting more of them to negotiation. This new Act repeals that change (Section 71203). What this means in real terms is that the original, broader exclusion for orphan drugs is back in place. For pharmaceutical companies developing rare disease treatments, this is a clear benefit, as it keeps their products shielded from federal price negotiations. For consumers and federal programs hoping to see lower costs for these specialized, high-price drugs, this rollback removes a potential tool for price control.

The Real-World Impact: Regulatory Whack-a-Mole

This Act is a perfect example of regulatory whiplash. For state Medicaid administrators, this means they have to stop implementing the rules from the repealed section and revert to the previous system. For patients, the impact of Section 2 depends entirely on the specifics of the rule that was repealed—was it a good change or a bad change for their wallet? The bill simply says, “Go back to how it was.”

Regarding orphan drugs, the impact is clearer: it maintains the status quo that existed before the previous reconciliation bill. This could be seen as protecting the incentives for developing drugs for rare conditions, which is crucial for the small population who needs them. However, it also means that a mechanism that could have potentially lowered the price of some of the most expensive medicines on the market is now eliminated, ensuring those costs remain high for patients and taxpayers alike.