A consumer advocacy group reports that a little-noticed Medicare policy shift delayed price negotiations for AbbVie's pancreatic insufficiency drug, Creon, by seven years. By allowing converted biologic drugs to use their conversion date rather than their initial approval date to calculate market exemption periods, the policy excluded Creon—which cost Medicare $1.49 billion in 2024—from negotiations. While the Trump administration proposes making this policy permanent, debate intensifies as revised CBO estimates suggest the IRA's drug provisions have cost taxpayers $700 billion.
Biologic conversion date policy
- ▪Between 2024 and 2025, the Centers for Medicare and Medicaid Services decided that certain biologic drugs originally approved as small molecules but later converted to biologics could use their conversion date to calculate the 11-year market exemption period.
- ▪The Trump administration proposed a new rule to make permanent the Medicare policy allowing converted biologic drugs to use their conversion date for price negotiation eligibility.
Creon negotiation delay impact
- ▪The drug chosen for Medicare negotiation instead of Creon accounted for approximately $500 million less in Medicare spending over the same period.
- ▪A Public Citizen report asserts that a Medicare policy shift delayed the selection of AbbVie's pancreatic insufficiency drug Creon for price negotiations by seven years.
- ▪In 2024, more than 185,000 Medicare beneficiaries used AbbVie's Creon, costing the Medicare program $1.49 billion in gross spending.
Most-favored-nation pricing proposals
- ▪An analysis by the AARP Public Policy Institute and Verdant Research projects that applying most-favored-nation pricing to 10 high-spending brand-name drugs would reduce Medicare spending by $197 billion from 2029 through 2033.
- ▪Seventeen pharmaceutical companies signed most-favored-nation agreements in July 2025 to match the lowest drug prices they charge in other industrialized nations.
Medicare negotiation cost estimates
- ▪The Congressional Budget Office sent a letter on July 29, 2026, estimating that the Medicare Part D drug pricing negotiation provisions of the Inflation Reduction Act have cost $700 billion.
- ▪The Congressional Budget Office initially estimated that the drug pricing negotiation provisions in the Inflation Reduction Act would save the federal government $129 billion from 2022 through 2031.
Pharmaceutical industry price opposition
- ▪The Pharmaceutical Research and Manufacturers of America strongly opposes most-favored-nation pricing, arguing it would reduce treatments, jeopardize research investments, and harm the American economy.
- ▪An August 2022 University of Chicago issue brief concluded that pharmaceutical price controls would increase healthcare spending by $50.8 billion over 20 years and result in 135 fewer drugs.
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