Healthcare Policy Pulse: What's Coming for 2025

The return of President Donald Trump to the Oval Office, alongside a Republican-controlled Congress, sets the stage for significant shifts in healthcare legislation, regulation, and policy. Themes will include deregulation, market competition, transparency, choice, decentralization, and national security. Specific priorities may include the reversal or modification of Biden-era policies, expansion of Medicare Advantage, improving access to primary care and aging-in-place, increasing domestic production to alleviate drug shortages, reforming 340B, and overhauling federal agencies like the FDA, CMS, and CDC. In 2025, healthcare leaders must prepare to act nimbly and with resolve to seize the opportunities that lie ahead while addressing the challenges that change will bring.

Future of 340B

The 340B Drug Pricing Program faces significant challenges in 2025 as a Republican-controlled Congress, the Trump administration, and influential pharmaceutical manufacturers push for reforms. Changes could redefine the program’s scope and structure, focusing on increased transparency, stricter regulatory oversight, and a shift toward rebate-based pricing models. Pharmaceutical manufacturers, supported by allies in Congress, are expected to push for reforms that could diminish financial benefits for hospitals participating in the program by narrowing the definition of covered entities, restricting contract pharmacy arrangements, and mandating detailed reporting on how 340B savings support patient care. Conversely, if enacted, the bipartisan SUSTAIN340B Act could formalize the role of contract pharmacies, clarify patient definitions, and enhance auditing. However, some Republicans may seek to amend the SUSTAIN340B to reflect a more conservative stance. There is also a growing trend of state-level activity to impose regulations on PBMs, insurers, and manufacturers.

Contract Pharmacies

The role of contract pharmacies has emerged as one of the program’s most debated aspects, both lauded for increasing access and criticized for perceived mission drift. Efforts by manufacturers to limit contract pharmacy use include:

• Limiting the number of contract pharmacies
• Requiring detailed claims data submission to manufacturers
• Restricting specific medications
• Imposing geographic limitations on the distance of contract pharmacies from the covered entity
• Transitioning from upfront discounts to post-sale rebate models

HRSA Oversight

The Health Resources and Services Administration (HRSA) oversees the 340B Drug Pricing Program and has faced oversight concerns and challenges, including limited statutory authority to impose or enforce rules, funding and staffing constraints, lack of access to comprehensive data to monitor compliance, and the overall complexity of program operations. In 2025, HRSA may be granted new legislative authority or receive increased funding as part of legislation like the SUSTAIN340B Act, implement standard reporting requirements for covered entities, adopt advanced data analytics, and publish further guidance on patient eligibility and contract pharmacies.

Judicial Rulings and Interpretations

In addition to legislative and executive activity, there have been many recent judicial rulings. The themes from the courts include statutory ambiguity on the scope of HRSA’s enforcement authority, the role of contract pharmacies, and permissible limits of manufacturer-imposed restrictions. Additionally, the courts have varied in the level of deference granted to HRSA’s interpretation of the 340B statute. While some decisions have supported HRSA’s oversight efforts, others have emphasized the need for clear legislative mandates. Judicial decisions increasingly reflect a power struggle among HRSA, manufacturers, and covered entities. In 2025, the legal landscape includes the possibility of a Supreme Court review of a case addressing HRSA’s enforcement authority or the legality of manufacturer-imposed restrictions that could provide definitive guidance. Also, on myriad issues, expect ongoing legal disputes between manufacturers, covered entities, and HRSA.

State-led Protections

As the 340B Drug Pricing Program faces federal uncertainty and increased scrutiny, state-level actions have increasingly shaped the 340B program, as states seek to protect covered entities from restrictive manufacturer and PBM practices. More than 30 states have enacted legislation to safeguard the program. Examples of measures taken include:

• Reimbursement Parity: Preventing the reimbursing of 340B-covered entities at lower rates than non-340B providers.
• Anti-Discrimination Measures: Prohibiting the exclusion of 340B entities from networks based solely on their participation in the program.
• Transparency Requirements: Mandating PBMs to disclose pricing practices and terms related to 340B drugs.
• Prohibiting Claims Modifiers: Preventing PBMs from requiring claims modifiers or additional data submission solely due to a pharmacy’s 340B participation.
• Protecting Access: Banning manufacturers from interfering with acquiring or delivering 340B drugs to contract pharmacies.
• Limiting Discriminatory Audits: Restricting PBMs and insurers from subjecting 340B entities to more frequent or invasive audits than non-340B providers.

Other emerging state-level trends include promoting model state legislation, civil penalties on manufacturers and PBMs for violating 340B provisions and restricting the sharing of 340B claims data with manufacturers unless explicitly required by federal law. State-level actions have created a patchwork of regulations that increase the program complexity for multi-state covered entities, PBMs, insurers, and manufacturers and raise concerns about access disparities. Additionally, the variability of regulations increased administrative burdens and costs, fueling the urgency for federal standardization.

Federal-level reforms, combined with manufacturer-led challenges and state-level protections, will test the program’s ability to adapt while preserving its mission to serve vulnerable populations.

Inflation Reduction Act

The future of the Inflation Reduction Act (IRA) is uncertain, with momentum to repeal the IRA in 2025. The IRA’s healthcare provisions have significantly impacted prescription drug pricing, out-of-pocket costs, and health insurance subsidies. Republican leaders have expressed concerns about Medicare price negotiations stifling pharmaceutical innovation and the impact of enhanced subsidies on federal spending.
Examples of how the IRA improves medicine affordability include:

• Out-of-Pocket Cap: A cap on out-of-pocket spending on Part-D covered medicines of $2000, including a cap on insulin of $35 per month per covered prescription and no cost-sharing for recommended adult vaccines.
• Elimination of the Coverage Gap (“Donut Hole”): The existing coverage gap phase, commonly known as the “donut hole,” is removed.
• Medicare Prescription Payment Plan: Enrollees can pay out-of-pocket prescription drug costs in capped monthly installments to the Part D plan instead of all at once at the pharmacy. The payment plan does not reduce the total out-of-pocket expense but may help those with higher cost-sharing (e.g., deductible) at the beginning of the plan year.
• Medicare Drug Price Negotiation: Medicare can negotiate directly with drug manufacturers on the price of single-source brand-name Medicare Part B and Part D drugs. Instead of post-sale confidential rebates, a
• Maximum Fair Price (MFP) will be negotiated and published. The MFP determines acquisition cost and reimbursement for the dispenser (e.g., pharmacy). However, there are many concerns and questions about the implementation of MFP, including:
  • Lower reimbursements that may not cover the cost of dispensing or further reduce shrinking prescription margins
  • Strains on cash flow while waiting for MFP refunds
  • Administrative burden and operational complexity of retail pharmacy implementation
  • Risks of payment delays from PBMs and manufacturers
  • Potential requirements for pharmacies to pre-fund the program

Fortunately, MFP will go into effect on January 1, 2026, providing some time to work on these challenges.

Proposals for Site-Neutral Payments

In 2023, the House passed a bill that included site-neutral Medicare payments for drug administration services in off-campus hospital outpatient departments (HOPDs), but ultimately the idea stalled in the Senate. However, in November of 2024, Senators Cassidy and Hassan proposed a bipartisan framework that expands site-neutral payments beyond the House’s bill. One framework eliminates grandfathering exemptions, expanding site-neutral payments to all hospital-owned sites of care away from the hospital’s main campus. Medicare would reinvest some of the savings generated from site-neutral payment reductions into rural and safety-net hospitals through targeted funding for specific service lines or alternative payment models.  Given bipartisan interest in expanding site-neutral payment policies within Medicare, potential legislative action is expected in 2025. Additionally, some states are pursuing legislation to prohibit hospitals that have acquired independent outpatient practices from charging facility fees. It is important to note that any form of site-neutral payments for hospitals that administer drugs in HOPDs or prohibitions on some facility fees will significantly impact hospital revenue.

State Pharmacy Legislative Trends

As of August 2024, the National Alliance of State Pharmacy Associations identified 147 bills introduced, of which 45 are now law, related to pharmacist scope of practice and payment for pharmacist-provided patient care services during the 2024 legislative session. Although there is no national standard, states continue to find ways for pharmacists to address patient access challenges to services. States continue to pursue or pass legislation around prescription drug affordability, importation, out-of-pocket caps, and pharmacy benefit managers.

The year ahead will bring many legislative, regulatory, and policy changes at the state and federal levels. Health systems must endeavor to assess the impacts of changes, engage in advocacy efforts, and be nimble in responding to final changes.

Calls to Action

• Prepare for potential revenue disruptions from site-neutral payment policies, 340B changes, and Medicare drug price negotiations. This includes quickly developing internal specialty pharmacy and ambulatory infusion programs that maximize internal business capture and reduce reliance on contract pharmacy revenues.
• Strengthen internal systems to meet increasing transparency and reporting requirements, leveraging advanced analytics to monitor and adapt to policy-driven financial impacts.
• Engage in advocacy efforts at state and federal levels around PBM oversight and the 340B program.

Looking for more information or assistance for your organization? Reach out to Visante today!

Subject Matter Experts: Jerame Hill, Angela De Ianni, and Kristin Fox-Smith