On June 15, 2022, the Supreme Court of the United States (SCOTUS) ruled in favor of hospitals over Medicare regarding a 340B reimbursement policy instituted in 2018 and unanimously decided that the almost 30% in cuts to Medicare outpatient drug payments for hospitals participating in the 340B drug pricing program was unlawful.

The OCM was a 5-year voluntary advanced payment model that the Centers for Medicare and Medicaid Services (CMS) developed through the Innovation Center (CMMI) beginning July 1, 2016. CMS changes to advanced payment models due to the COVID-19 Public Health Emergency turned it into a 6-year model, which ended June 30, 2022.

President Biden signed the Inflation Reduction Act (IRA) into law on August 16th. The law includes new spending on climate initiatives, new taxes and enforcement, and drug pricing controls include significant changes to the Medicare Part D benefit. On the surface, measures to address drug pricing has had broad bipartisan support; however, the implications from this law may have unintended consequences to the Part D beneficiaries, payers, as well as to drug development and innovation for years.

The Centers for Medicare & Medicaid Services (CMS) recognize that health care spending rises as a percent of gross domestic product (GDP) yearly while also underperforming on quality and equity. In this article we will review current and emerging initiatives including new and proposed SDOH quality measures and activities linked to plan and provider payments and incentives, discuss barriers to success, and propose win-win solutions for pharmaceutical companies to advance these initiatives.