This bill modifies how Medicare negotiates prices for orphan drugs, which are medications designed to treat rare diseases and conditions. Under current law, Medicare can negotiate drug prices once a medication reaches $200 million in annual spending. The bill increases this threshold to $400 million specifically for orphan drugs that have no approved uses outside of treating rare diseases, effectively delaying when Medicare can negotiate prices for these specialized medications. The change applies to price negotiations beginning January 1, 2028, and affects drug manufacturers and Medicare beneficiaries who use rare disease treatments. The bill essentially exempts orphan drugs from price negotiations longer than other medications, giving pharmaceutical companies more time before facing federal price negotiation requirements for these drugs.
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