Healthy Returns: Trump provides a glimpse of the third round of Medicare drug price negotiations

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The Trump administration is already gearing up for another round of Medicare drug price negotiations, but it will look a little different this time around. 

The U.S. Centers for Medicare and Medicaid Services on Monday issued new draft guidance for that third cycle, as the second round of negotiations is underway. The process was established under the Biden administration’s signature Inflation Reduction Act as a way to rein in high health care costs for older Americans. 

CMS plans to announce a list of 15 drugs eligible for the third round of price talks by February 2026, which will then kick off months of back and forth between the government and manufacturers if they agree to participate. The new negotiated prices for those products will go into effect in 2028.

But here are the biggest changes this time around: 

• Medicare Part B drugs – For the first time, the list would include drugs payable under Medicare Part B – which covers medicines administered in a doctor’s office or hospital – in addition to prescription drugs covered under Medicare Part D. Previous rounds only targeted Part D medications. 
• Renegotiation process – CMS may choose to renegotiate the prices for certain drugs that already had prices set for the first and second cycles of talks, including those with new approved uses or changes in “monopoly status.” The agency will announce any medicines selected for the first cycle of renegotiation, with revised prices for those products taking effect in 2028. 
• Transparency – CMS is aiming to boost transparency around the process, seeking public feedback on topics such as how the agency determines an initial price offer for a drug. 

“This draft guidance is critical to creating a transparent, competitive, and fair prescription drug market that puts American patients first,” Medicare Director Chris Klomp said in a release.

But Wall Street analysts are focused on another part of the guidance that could cause issues for Merck, Bristol Myers Squibb and some other pharmaceutical companies. 

The guidance document suggests that the Trump administration could end a workaround that those companies are using to drag out revenue from top-earning cancer drugs, such as Merck’s Keytruda and Bristol Myers Squibb’s Opdivo.

The plan had been to shift patients to newer injectable – or subcutaneous – versions of their cancer drugs and keep charging Medicare higher prices for them, even after their original intravenous versions are subject to new negotiated prices under the program. Drugmakers have been banking on those subcutaneous versions as a way to dampen the revenue they would lose from Medicare drug price negotiations, along with upcoming patent expirations for the original forms of their drugs. For example, key patents for Keytruda start expiring in 2028. 

Under the current rules, complex drugs known as biologics are eligible for the negotiation process after 13 years, but the clock restarts for a new version of the drug – like a subcutaneous form – that adds an additional active ingredient.

Subcutaneous versions of drugs like Opdivo are combination products that include an additional ingredient, allowing them to be injected quickly instead of being slowly infused like the original intravenous form.

But on Monday, CMS said it is “soliciting comments” on how it “might consider” grouping these combination drugs with their original versions — if the added ingredient doesn’t affect how the drug treats the underlying disease. In other words, the agency is considering whether to count two versions of a drug as a single product in certain cases. 

That appears to be “somewhat targeted” at products such as subcutaneous Keytruda and Opdivo, JPMorgan analysts said in a note on Monday. They said the guidance leads to “at least the potential for inclusion” of those drugs in future negotiations. 

Still, no changes are final yet, so it may be too soon to predict the impact on drugmakers like Merck and Bristol Myers Squibb. 

Feel free to send any tips, suggestions, story ideas and data to Annika at annikakim.constantino@nbcuni.com.

It’s not unusual for CEOs who transformed their companies to step back into leadership when things veer off course. 

This week, UnitedHealth Group Chairman Stephen Hemsley took a page from Bob Iger’s playbook at Disney, and took back the CEO position at the company following the abrupt departure of Andrew Witty.

The last six months have been challenging for Witty, following the murder of UnitedHealthcare CEO Brian Thompson and disappointing first-quarter earnings. Shares hit a four-year low in recent weeks as it became increasingly clear that United’s Medicare Advantage peers had done a better job of pricing for elevated costs in Medicare this year.

During Hemsley’s 11-year tenure as CEO, UnitedHealth’s stock rose more than 300%, as he built the company into a health care juggernaut. Following the massive growth, the company and the industry as a whole have been facing waves of regulatory pressure and public scrutiny of their businesses.

For Hemsley, it’s a whole new environment to navigate as he tries to right the ship.

Feel free to send any tips, suggestions, story ideas and data to Bertha at bertha.coombs@nbcuni.com.

OpenAI on Monday launched a new evaluation tool called HealthBench, a benchmark that will help test how artificial intelligence models perform in realistic health-care scenarios. 

“If developed and deployed effectively, large language models have the potential to expand access to health information, support clinicians in delivering high-quality care, and help people advocate for their health and that of their communities,” OpenAI said in a blog post. “To get there, we need to ensure models are useful and safe.”

The company said HealthBench was developed alongside 262 doctors from 60 countries. It’s based on 5,000 conversations that simulate interactions between individual users or clinicians and AI models. The discussions are split into seven different themes, including global health, emergency situations and handling uncertainty. 

When a model responds to a prompt, each response is graded against a set of “physician-written rubric criteria specific to that conversation,” OpenAI said. HealthBench contains 48,562 unique rubric criteria.

OpenAI included one example where a user said they found their 70-year-old neighbor unresponsive on the floor. The AI model in that instance told the user to take action right away, and included eight steps they could follow. HealthBench gave this answer a 77% based on its rubric criteria. 

OpenAI said HealthBench responses were evaluated against responses written by doctors to understand how the model compared to their clinical judgement. The company found that HealthBench “closely aligns” with physicians’ grading. 

OpenAI said it used HealthBench to evaluate several existing models, including its own o3, GPT-4.1, o1, GPT-4o and GPT-3.5 Turbo models, xAI’s Grok 3, Google’s Gemini 2.5 Pro, Anthropic’s Claude 3.7 Sonnet and Meta’s Llama 4 Maverick. 

The company found that o3 outperformed other models, and it said its models have improved by 28% on HealthBench. 

OpenAI said the full evaluation suite and underlying data for HealthBench is available in its GitHub repository. 

“We hope this supports shared progress toward using AI systems to improve human health,” the company said.

Read the full blog post here.

Feel free to send any tips, suggestions, story ideas and data to Ashley at ashley.capoot@nbcuni.com.