AMP is WAC -- 5/22/26
All Ears
Memorial Day weekend is such a change in vibe. It means it’s acceptable to read (or chat with friends) by the pool for hours because you did something. It’s summer Friday afternoons that are magically slower. And, my favorite, the changing traffic patterns that make every outing easier. The weather might not yell summer yet, but the attitude already can.
Ex-U.S. Marks the Spot. Last week, Reuters reported that some U.S. biotech companies are considering moving early-stage trials outside the U.S. as mass layoffs, leadership exits and restructuring at the Food and Drug Administration (FDA) under the Trump administration prompt concerns about regulatory review delays.
The FDA is the global gold standard for drug regulation. Companies typically seek American approval first because it provides access to a $635 billion annual market. But Reuters spoke to seven biotech executives, investors, and consultants who said staff departures and policy changes at the FDA had prompted some firms to consider launching trials in the EU and Australia instead.
One biotech CEO told Reuters their company plans to run early-stage oncology trials in three European countries in addition to its U.S. trial. Cost: $1 million in additional filings and several million more to run the trials.
Big pharma companies said they haven’t seen changes in FDA interactions. But for smaller biotechs, even a two-month delay could be existential.
For manufacturers, this is the downstream effect of regulatory uncertainty. If early-stage work moves offshore and the U.S. becomes the final approval step rather than the starting point, that’s a fundamental shift in how drug development works. Which, of course, has to be balanced with the Most Favored Nation (MFN) policies, but every launch counts towards viability.
The Deductible Ate My Coverage. Last Friday, the Centers for Medicare & Medicaid Services (CMS) finalized a rule expanding access to catastrophic health plans on the Affordable Care Act (ACA) exchanges, effective 2027. Catastrophic plans now allow enrollment periods up to 10 years and let people who lose subsidy eligibility due to income changes sign up mid-year. The rule also kills standardized plan designs, removes caps on non-standard plan offerings, and allows insurers to sell plans without provider networks for the first time.
Catastrophic plans come with $10,000+ deductibles. They were envisioned to be for healthy 25-year-olds who never go to the doctor or people in genuine hardship situations. The expanded access follows the lapse of enhanced premium tax credits at the end of 2025, which triggered an enrollment drop and pushed hundreds of thousands into high-deductible plans to avoid premium shock.
The Trump administration calls this consumer choice. That’s generous. Catastrophic plans expose people to massive out-of-pocket costs, which means care avoidance or medical debt. Non-network plans are worse. No contracted provider rates means the plan sets reimbursement amounts and members eat the difference. Whether that design even meets the ACA’s network adequacy standard is unclear, but CMS is moving forward anyway.
(I’d like to inject an aside -- 37% of Americans would have difficulty with a $400 unexpected expense. How many would have trouble with deductibles in the thousands?)
Catastrophic enrollees skip prescriptions because of cost-sharing. The rule also tightens eligibility verification for low-income subsidies and eliminates special enrollment periods for certain populations, which could shrink the insured base even more. CMS is solving affordability by expanding access to coverage that makes care less affordable.
Board to Be Wild. On Friday, Maryland’s Prescription Drug Affordability Board (PDAB) capped Ozempic at $274 for a 30-day supply starting January 2027, benchmarked to Medicare’s Maximum Fair Price. Projected state savings: $5.8 million annually. This is Maryland’s second upper payment limit in a month; they capped Jardiance in April and have more drugs under review.
Maryland isn’t building independent drug-by-drug cases like other state affordability boards. They’re taking whatever Medicare negotiates under IRA and applying it as the state upper payment limit. Starting in 2028, those limits extend to commercial coverage statewide.
On Monday, Virginia Governor Abigail Spanberger vetoed legislation that would have created a PDAB using Medicare’s negotiated prices as the benchmark for state-regulated commercial insurers. Projected savings: $95 million annually. Spanberger’s reason: affordability boards in other states haven’t lowered costs, they’re expensive to run, and some are reconsidering them. She offered amendments to study reference-based pricing and expand authority to address anticompetitive behavior. The legislature rejected the amendments because they would have blocked the board from using Medicare prices as the ceiling.
Spanberger ran on drug affordability. But her read on other state boards isn’t wrong; they are slow, and measurable impact is hard to find. The Virginia bill would have bypassed that by adopting Medicare’s work product directly, exactly what Maryland is doing.
For manufacturers, Maryland just turned IRA negotiation into a price control mechanism that applies to every covered life in the state without the volume guarantee Medicare provides. Upper payment limits won’t necessarily lower patient out-of-pocket costs and will likely create formulary restrictions and prior authorization barriers.
The Virginia veto bought twelve months. Maryland proved the copy-paste model works legislatively. If other states follow, negotiated prices become national ceilings across all payers.
Bronze Is the New Broke. On Monday, KFF published data showing ACA Marketplace enrollment dropped at least 17% in 2026 after enhanced premium tax credits expired. Average effectuated enrollment is projected to fall to 17.5 million, down from 22.3 million in 2025. That’s 4.8 million people gone.
Premium payments jumped 58%, from $113 to $178 per month on average. The share of enrollees receiving tax credits fell from 92% to 87%, the first decline since 2020. Average deductibles surged 37%, from $2,759 to $3,786. That’s the steepest increase since the Marketplaces launched. It’s driven by people fleeing silver plans for bronze. Bronze enrollment went from 30% to 40% of plan selections. Silver dropped from 57% to 43%, the first time fewer than half of enrollees chose silver.
The income distribution tells the whole story. People just above 400% FPL, who lost subsidy eligibility entirely, were 3% of 2025 sign-ups but 27% of the drop. Sign-ups in that group fell 44%. Lower-income consumers stayed at higher rates but downgraded coverage to avoid premium increases. They’re choosing bronze plans to avoid premium increases, which means huge deductibles when they need care.
For manufacturers, this is worse than straight coverage loss. The people who stayed bought coverage that likely renders them under-insured if not basically uninsured -- $3,786 average deductible before anything’s covered means prescription abandonment, adherence tanks, access craters. Bronze plans don’t have the cost-sharing reductions that made silver plans work for lower-income patients.
You Betcha, 340B Bill Dies Quietly. Minnesota hospitals pushed lawmakers this session to strengthen and extend the state’s 340B provision, which sunsets next year. The bill would have given the Attorney General authority to sue drug companies that hospitals claim are not following program requirements. It died without a vote.
Reimbursement Fundamentals – 340B Has Boundary Issues
On May 13, Paragon Health Institute published a piece calling for Congress to eliminate 340B’s spread-based pricing and replace it with a charity-care formula. On Monday, JAMA published a story tracking Health Resources and Services Administration’s (HRSA’s) paused 340B rebate pilot. Both are great educational pieces on how the program works. Both propose restructuring how the money moves. I’m not sure either gets to the root of the problem.
Here’s how the spread works. Covered entities buy drugs at 22.5% to 50% off average sales price (sometimes up to 100%, though statute requires they pay at least a penny). They bill payers at standard reimbursement rates. The gap is revenue.
The spread creates backwards incentives. Hospitals chase higher-cost drugs (bigger spread), expand into commercially insured areas (better reimbursement), and consolidate to capture more child sites. IQVIA pegged 340B at $6.6 billion in cost increases for employer coverage and $1 billion for state and local governments in 2023. A 2022 JAMA study found contract pharmacies clustering in wealthy, predominantly White neighborhoods while pulling out of poorer, predominantly Black and Hispanic areas.
Paragon’s proposal: replace the spread with a user fee redirected to hospitals based on charity care as a share of revenue. That would disconnect 340B from volume, killing the consolidation incentive. Whether Congress can actually pass it is the completely different conversation.
Now layer in what HRSA tried. The rebate pilot would have changed how 340B works on the front end. Right now, covered entities buy drugs at the discounted 340B price upfront. Say a drug has a $1,000 list price and an $850 wholesale acquisition cost. The 340B price might be $550. Covered entity pays $550, bills the payer at the higher rate, keeps the spread. Under the rebate pilot, covered entities would have paid $850 upfront and received a $300 rebate later, after dispensing the drug and submitting a claim to the manufacturer. It applied to 10 drugs. All covered entities buying those drugs had to participate.
HRSA proposed the pilot in July 2025 for a January 2026 start. Hospitals sued in December. Federal courts blocked it. HRSA withdrew it in February and issued a Request for Information asking whether to try again.
The courts blocked it on procedure; HRSA hadn’t built an adequate record and had said in 2024 that a rebate model would disrupt operations. The Trump administration had also tried to run a transparency pilot requiring covered entities to verify drugs weren’t getting duplicate discounts through Medicare’s Maximum Fair Price or another 340B rebate. Hospitals sued, won, and that pilot got shelved for violating the Administrative Procedure Act.
The RFI tells you HRSA still wants to restructure the program. But the rebate doesn’t address consolidation, child site growth, or contract pharmacy proliferation. Paragon’s user fee model at least changes the incentive structure but doesn’t answer the foundational questions.
What 340B needs is clarity on who qualifies, how revenue gets used, and what counts as serving the safety net. Which covered entities are using 340B dollars to expand access for vulnerable patients? Which ones use it to subsidize expansion into commercially insured suburban markets? The program doesn’t track that and HRSA doesn’t require it.
For manufacturers, this is moving payment timing around without fixing program boundaries. What replaces the spread matters -- whether it’s a rebate, a fee, or something else. But the bigger question is whether any restructuring can happen without finally defining what 340B is supposed to do and who it’s supposed to serve.