AMP is WAC -- 06/12/26
Leap of Faith
The song “These are Days” is the ear worm that felt like it lives in every moment this week. On Tuesday there was a high school graduation, Thursday brought a wedding reception at the Richmond Flying Squirrels game. What hopeful moments in a lifetime. June is just that kind of month.
So much news out there, here’s what caught my eye this week.
Another Two Bite the 340B Dust. Last week, two more states added to the manufacturer loss column in the 340B contract pharmacy fight, and they didn’t do it the same way.
In Mississippi, the U.S. District Court for the Southern District denied AbbVie’s motion for summary judgment and granted Mississippi Attorney General Lynn Fitch’s cross-motion for summary judgment, dismissing AbbVie’s complaint with prejudice. AbbVie had thrown preemption, takings, due process, and the Commerce Clause at the wall. None of it stuck. This follows the Fifth Circuit’s earlier denial of a preliminary injunction and its ruling in the Louisiana case that an essentially identical statute regulates delivery, not price. AbbVie has now lost at every stage in Mississippi, on top of losses in Tennessee, Louisiana, Arkansas, Hawaii, Maine, Colorado, Nebraska, and South Dakota.
In Washington, a U.S. District Court Judge rejected a preliminary injunction challenge from AbbVie, Novartis, and PhRMA against Senate Bill 5981, a state 340B law signed by Governor Ferguson in March and effective immediately. The law prohibits manufacturers from restricting contract pharmacy arrangements and bars data demands as a condition of 340B pricing access. Novartis, AbbVie, and PhRMA immediately appealed. AstraZeneca is also named but did not seek the preliminary block.
The legal theory is the same one that’s been relitigated across more than a dozen courts now: federal preemption. Courts keep reading federal silence on 340B drug distribution as permissive rather than exclusive. Nothing in the statute reserved this territory for Congress. The ruling is consistent with that body of case law.
There is one complication. A North Dakota federal judge ruled the opposite way in April, blocking a similar 2025 state law as interference with federal programs. Two federal judges, same statutory question, different answers. That circuit split is where this fight is heading.
Washington’s law also adds a data twist. Rather than manufacturers demanding claims data from covered entities directly, both sides submit data to the state. The attorney general can enforce violations. Covered entities can bring their own suits. UW Medicine expects $85 million in savings under the law.
Manufacturers have the executive branch on their side through the DOJ brief in the Colorado appeal. The judiciary, at least at the district and circuit level, keeps going the other direction. Whether the path forward runs through Congress, HRSA rulemaking, or the next Supreme Court term is the more interesting question right now.
Your Honor, This Pricing Chain Is Weird. Last Thursday, the U.S. District Court in Denver heard arguments in Amgen’s challenge to Colorado’s Prescription Drug Affordability Board’s (PDAB) upper payment limit (UPL) on Enbrel. Amgen is asking for a preliminary injunction blocking the cap, which is set to take effect next year. The judge said he would issue a written ruling soon.
The core of Amgen’s argument is that Colorado’s PDAB targeted Enbrel precisely because it’s still under patent, and that capping the price of a patent-protected drug interferes with federal patent law’s design: grant exclusivity, let the company price, accordingly, fund R&D.
The state’s response is that the UPL technically caps what the end purchaser, a patient or insurer, pays, not what Amgen charges. There are wholesalers and pharmacy benefit managers (PBM) in between, and who absorbs the loss is genuinely unclear. (hahahahahaha, it won’t be wholesalers or PBMs.)
The state’s own attorney acknowledged the pharmaceutical pricing chain is counterintuitive enough that she couldn’t say for certain where the hit lands. To which the judge, who spent part of the hearing getting a crash course in WACs (wholesale acquisition cost) and chargebacks and rebates, replied deadpan: “Well, I am.”
That exchange is the most useful thing to come out of the hearing for this audience. The patent preemption theory is untested. If the judge issues an injunction and the case proceeds, this becomes the first serious judicial test of whether state UPLs on patent-protected drugs survive a federal IP challenge. Colorado is where the PDAB model gets stress-tested for real.
Priority Boarding, No Flight Plan. On June 4, STAT reported that the Food and Drug Administration (FDA) held a public listening session on the Commissioner’s National Priority Voucher (CNPV) program. Seventeen speakers showed up, representing pharma companies, patient advocates, and academic organizations. Most of them asked the agency to pause the program and restart it through formal notice-and-comment rulemaking.
Quick background for those who haven’t been tracking this: former Commissioner Marty Makary launched the CNPV program a year ago, offering one-to-two-month review timelines for drugs deemed to align with “national priorities.” The criteria were vague enough that the White House used the program to reward companies participating in GLP-1 price programs, Joe Rogan successfully lobbied for psychedelic drug vouchers, and at least one voucher was awarded over the objections of career FDA scientists. Makary resigned in May. The program’s future has been uncertain since.
The concerns from the session were predictable (and, IMO, totally valid): criteria too vague to be legally defensible, political interference baked into the design, and the non-transferable nature of these vouchers creates confusion with the FDA’s existing tradeable voucher programs. Sanofi pulled a diabetes drug out of the program after the review was interfered with by a senior official.
The positive feedback came mostly from companies whose drugs already cleared the pathway. Johnson & Johnson said its rare blood cancer therapy was nominated proactively by the FDA in December and approved in March.
It isn’t that a priority pathway is bad, but this one seems a little sus. If the program gets formalized with real criteria and process protections, it’s worth watching. One-to-two-month reviews are genuinely meaningful competitive advantages. The question is whether the FDA can design guardrails that hold.
Prick from the Thicket. Last week, a House Judiciary panel held a hearing on how brand-name manufacturers use the patent system to extend exclusivity and block generic and biosimilar entry. (Pro tip, start a little late and watch it at 1.5x. Even smarter? Wait for someone else to report on it.)
Two bills are moving through the conversation: a skinny labeling protection bill and the Eliminating Thickets to Increase Competition (ETHIC) Act, which would limit the number of patents brand-name manufacturers can assert in litigation against generic and biosimilar competitors.
The term “patent thicket” refers to a dense web of overlapping patents surrounding a single product. Even after a drug’s original patent expires, a manufacturer may hold dozens of secondary patents covering formulations, dosing, delivery mechanisms, or manufacturing processes. Generic and biosimilar competitors have to challenge each one or design around them, which is expensive and slow. Humira had over 130 patents. Keytruda’s thicket is building.
The ETHIC Act attempts to limit how many of those patents can be asserted in a single litigation. The hearing also surfaced the limits of the Supreme Court’s recent skinny labeling decision, with experts noting that brand manufacturers could return to litigation on grounds the Court didn’t address and that biosimilars face a distinct legal context the ruling didn’t touch.
Both bills have bipartisan support. Insurers and generic manufacturers are backing them. Brand manufacturers are pushing back hard. If you’ve been reading my stuff for a while, you know that I would have favored patent reform over Medicare negotiation, but no one asked me.
Whether either bill moves is genuinely uncertain. Patent legislation is technically complex, politically contested, and typically slow. But the conversation is getting more concrete, and for manufacturers with significant late-lifecycle branded products, the direction of travel here is worth watching.
The FDA Tries Bedside Manner. Last week Reuters reported that acting FDA Commissioner Kyle Diamantas met with rare disease advocacy groups, including Friends of Cancer Research and the Foundation for Angelman Syndrome Therapeutics. The meeting was framed as fence-mending after Commissioner Marty Makary’s tenure, which ended with his resignation last month following a clash with the White House over vaping products.
Under Makary, the FDA declined to approve Biohaven’s experimental treatment for a brain disorder, slapped a serious safety warning on a Sarepta gene therapy, and a top agency official publicly called UniQure’s Huntington’s therapy a “failed product.” Rare disease groups had grown frustrated, and a coalition pressed Trump and the Health and Human Services (HHS) leadership in April for greater regulatory clarity.
Diamantas, who came up through the agency’s food side rather than drug review, is being described as a steady hand. He’s reportedly under consideration for the permanent role. The groups said no promises were made but that officials listened to their case for novel clinical trial approaches, engagement with the broader public, and predictability from FDA.
It’s a start. From what I’ve heard, HHS has been dismissive of patient groups and turned down meeting after meeting. Or said things like “it’s fixed” to problems that are clearly not fixed. Tone matters, and listening is not nothing after a period when rare disease sponsors felt like they were being graded on a curve they didn’t know existed.
The real test is what comes out of these conversations. Consistency and predictability in rare disease review aren’t delivered by a single meeting. They’re delivered by guidance, by staffing, and by an agency that has the expertise to make good decisions.
Cure Now, Pay Later. On Monday, STAT published an opinion piece from William Padula at the USC Schaeffer Center arguing that gene therapies, many priced at $2 million or more per patient, represent a financing problem more than a pricing problem. The piece is timely, and the argument is a good reminder because we will keep having the discussion until we find a path forward.
Padula’s core point is that payers operating on annual budgets can’t absorb a $2 million upfront cost, even when the therapy genuinely delivers decades of value. CMS’s Cell and Gene Therapy Access Model for sickle cell in Medicaid is attempting to address this through outcomes-based contracts, but those models still don’t solve the fundamental budget cycle mismatch. His proposed solution is a financing intermediary that funds treatment upfront and recovers costs over time, structured like amortizing a mortgage.
You’ve heard this before; annuity payment structures, outcomes-based agreements, and reinsurance concepts have been circulating since Luxturna. The reason none of them has become the market standard is coordination. You need payers, manufacturers, providers, and sometimes states agreeing on what success looks like across a system where patients change plans, outcomes take years to materialize, and the regulatory environment around best price makes outcomes-based deals structurally risky for manufacturers.
Padula is right that this is a financing problem, not a science problem. The FDA recently issued draft guidance to accelerate cell and gene therapy development, which means the pipeline is moving faster than the payment infrastructure around it. If we want the innovation to continue, we need to fix that gap soon. There are other places for people to invest their money that look more promising.
Cliff Notes: The Ripple Effect. Late last week, Washington Post Intelligence published early data from Ensemble Health Partners, which handles patient registration and revenue functions for more than 1,800 physician practices, 300 hospitals, and 35 health systems across 41 states. The finding: uninsured patients are up 25% year over year. The nation’s largest for-profit hospital chains confirmed the same pattern in their Q1 filings. HCA reported nearly a 19% increase in estimated uncompensated care costs compared to Q1 2025. Universal Health Services saw discounts for uninsured patients jump roughly 41%.
The Commonwealth Fund just published new state-level data on 2026 Affordable Care Act (ACA) marketplace enrollment. Open enrollment dropped 1.2 million people, a 5% decline and the largest single-year drop since the marketplaces opened. But the enrollment number understates what’s happening. Plan cancellations between January and March rose 24% over last year. An estimated 14% of people who signed up for a 2026 plan never paid their January premium. State data through April shows post-enrollment drop-offs of 13% to 16% in Arkansas and Colorado, compared to 3% to 8% in those same states last year. Maryland went from a 3% drop-off to 13% in a single year.
Remember the government shutdown last year? This was what it was hoping to avoid. Enhanced premium tax credits expired at the end of 2025. Middle-income consumers faced unprecedented net premium increases. The share of enrollees in bronze-tier plans increased from 30% to 40%. Average annual deductibles rose by $1,000, to nearly $3,800. Analysts are now projecting 2026 marketplace enrollment will decline 17% to 26% from last year. Roughly 5 million people. This my subjective aside… is there fraud in the program? No doubt, where there is an opportunity, there is fraud. But are normal people – our family, friends and neighbors caught in this decline – absolutely.
Medicaid enrollment declined by about 3.8 million people between February 2025 and February 2026. Work requirements take effect January 1, 2027. KFF projects ACA enrollment may fall from over 22 million in 2025 to between 16.5 million and 17.5 million by end of 2026.
It’s not the future; it is today. It is already in Q1 filings. For manufacturers, more uninsured patients mean more demand for free goods, bridge programs, and patient assistance, and the disruption isn’t temporary if coverage doesn’t recover. There’s no current policy mechanism pointed at recovery. And 2027 likely will get worse unless something is done.
Deep Dive – Circular Logic: MFN Updates
This week, STAT News reported that Europe is fracturing along two different lines when it comes to drug pricing. The U.K. raised its NICE cost-effectiveness thresholds, increased drug spending commitments, and secured a tariff carveout. Germany, facing budget deficits and a health system under pressure, is heading the other direction: increasing clawback taxes, adding volume-based discount requirements, and watching Eli Lilly and Boehringer Ingelheim announce they’re pulling back billions in planned investment. Same continent, opposite strategies, same pressure point. And that pressure point is Most Favored Nation.
MFN pricing, in any of its forms (GLOBE for Part B, GUARD for Part D, GENEROUS for Medicaid, the bilateral voluntary agreements), depends entirely on a reference basket. The U.S. price gets benchmarked to what other wealthy countries pay. The policy only saves money if that basket is real, representative, and stable. And right now, the basket is being hollowed out by the policy itself.
The Asahi Shimbun reported this week that Eli Lilly’s breast cancer drug Imlunestrant, approved in the U.S. in December 2025, still has no price set in Japan because no one can figure out what that price would do to U.S. MFN calculations. Japan historically prices new drugs at about 40% of U.S. levels. Of 460 drugs sold in Western markets between 2014 and 2023, 245 never launched in Japan at all. The concern isn’t new, but it is accelerating. Companies are now delaying Japanese launches specifically to avoid creating a reference price that feeds back into the U.S. market.
Insmed said last month it won’t launch its lung disease drug in Europe for now, citing MFN uncertainty. Amgen pulled Repatha from Denmark’s market earlier this year. As Nathan Jibat and Jeromie Ballreich at Johns Hopkins wrote in Health Affairs, Amgen made a rational commercial decision: sacrificing roughly $16 million in Danish revenue to protect a Medicare market running $1.75 billion. The math is straightforward. And it tells you exactly what every company’s internal pricing team is running right now.
Now layer in the Germany situation. POLITICO reported that U.S. officials are holding talks with German Health Minister and Economic Affairs Minister. The goal is to persuade Germany to follow the U.K.’s lead and pay more for drugs. Meanwhile, Germany’s domestic proposal moving through Parliament would require volume-based discounts and increase clawback rebates year over year, precisely the kind of structural cost reduction the U.S. is trying to reverse.
This is the rub. The U.S. needs European prices to rise so that MFN benchmarks move up. European governments, facing aging populations, defense spending pressure, and squeezed health budgets, need prices to fall. Those two things cannot both happen. And the leverage the U.S. has over individual EU countries is structurally weaker than what it had with the U.K. Because trade policy is an EU competence, Germany can’t offer the same kind of tariff-relief package the U.K. could. The administration is essentially asking sovereign finance ministries to absorb higher pharmaceutical costs as a favor to American trade policy. That is a hard sell in an election year anywhere.
The STAT piece includes a line worth flagging. Cytokinetics recently launched its heart disease drug Myqorzo in Germany, with a U.S. list price of $108,400 against a German list price of about $20,240. That’s roughly an 80% gap. That gap is what MFN is designed to close by pulling the U.S. price down. If that German price becomes reportable in a GUARD or GLOBE calculation, the pressure on the U.S. price is real. And if Cytokinetics or any company in the same position eventually decides, as Amgen and Insmed have, that protecting the U.S. price is worth more than the European market, the German price disappears from the basket entirely.
The policy’s internal logic is circular. To work as designed, MFN needs a populated basket of real international prices. But the policy is creating rational commercial incentives to depopulate that basket, market by market, drug by drug, until the benchmark is either unrepresentative or simply unavailable. At that point, either the framework collapses on its own or Congress has to mandate something much more coercive to keep it alive.
For manufacturers, there are two distinct strategic questions here.
The first is the pricing question: do you launch in reference countries, knowing you may be anchoring a future U.S. calculation?
The second is a market access question most people are underweighting: patients in Japan, Germany, France, and Denmark are not abstract trade policy variables. They’re patients. When Inluriyo doesn’t get a Japanese price, Japanese women with advanced breast cancer don’t get Inluriyo. When Repatha exits Denmark, 2,000 Danish patients lose access to a cholesterol drug. The U.S. administration is treating those access gaps as acceptable collateral in a pricing negotiation. Whether they remain acceptable is a different question.
The reference basket theory of MFN assumes the world cooperates. The world is currently demonstrating that it won’t.