Q&A with the Cencora Office of U.S. Public Policy and Advocacy
By Lisa Harrison, Beth Mitchell
Cencora is committed to keeping our customers informed about government and legislative actions that impact community-based specialty practices. In this edition of our series, Lisa Harrison, SVP & President, Specialty Distribution and Solutions at Cencora, and Beth Mitchell, VP of U.S. Public Policy and Advocacy at Cencora, discuss the latest on the Inflation Reduction Act’s Medicare Drug Price Negotiation Program and the One Big Beautiful Bill Act.
Important note: This article is based on publicly available information and does not reflect any developments that may occur following the published date. This article represents our current understanding and interpretation of information related to the topics included in this article and is subject to change as new information becomes available. This article is not intended to communicate legal advice, direction, opinion, or guidance on behalf of Cencora, the U.S. government, or any entities that are mentioned herein.
The Inflation Reduction Act's Medicare Drug Price Negotiation Program
Lisa Harrison (LH):
Beth, as always, thank you for joining me today. I’d like to start with discussing the Inflation Reduction Act’s Medicare Drug Price Negotiation Program (IRA MDPNP). What should our customers be aware of?
Beth Mitchell (BM):
Great place to start. The most important date to mention is January 1, 2026. This is when the first round of maximum fair prices (MFPs) for the first 10 selected Part D drugs will go into effect.
The Centers for Medicare & Medicaid Services (CMS) established the new Medicare Transaction Facilitator (MTF) as a core component of implementing the IRA MDPNP by providing the operational infrastructure and logistical support to facilitate MFP effectuation. There are two modules within the MTF: The MTF Data Module (MTF DM) and the MTF Payment Module (MTF PM). The MTF DM is being used to facilitate the exchange of data to help manufacturers identify and provide MFP refund payments on eligible claims. The MTF PM offers an optional service to manufacturers to assist in transferring MFP refund payments to dispensing entities.
LH: Are dispensing entities required to enroll in the MTF DM?
BM: Enrollment in the MTF DM is required for dispensing entities, per their part D sponsors’ network participation agreements.1 With that said, it is also a requirement to participate in the Medicare Drug Price Negotiation Program, but it does not obligate the dispensing of MFP medications. Despite there being no enrollment deadline, CMS recommends “pharmacies and other dispensing entities enroll as soon as they are ready” to begin receiving eligible rebates.
LH: For dispensing entities that plan to enroll, how can they do so?
BM: CMS has released several helpful resources to assist in the enrollment process including a user guide, FAQ overview, and a step-by-step enrollment video. Dispensing entities can also contact the CMS Help Desk directly with any questions.
The One Big Beautiful Bill Act (H.R.1)*
LH: Let’s spend a moment discussing the One Big Beautiful Bill Act. This continues to be a topic that our customers commonly inquire about.
BM: Absolutely. The One Big Beautiful Bill Act (OBBBA), which was enacted on July 4, 2025, is a federal budget reconciliation package intended to reshape federal spending, reduce the deficit, and reform major entitlement programs.2 We are collaborating with trade associations such as the Healthcare Leadership Council (HLC) and HDA to assess OBBBA’s health policy implications, in addition to collaborating with our internal subject matter experts to assess the total impact of OBBBA’s health policy provisions on Cencora and our customers.
LH: I know that OBBBA has numerous aspects addressing multiple topics. Are there any healthcare-specific considerations that our customers should be aware of?
BH: While the law primarily focuses on tax cuts, bolstering the U.S.’s border security, fossil-fuel friendly energy initiatives, and boosting domestic production, there are a few things for healthcare providers to be aware of. OBBBA contains provisions that:
- Gradually reduces the maximum provider tax rate from 6% to 3.5% for states that have expanded Medicaid, beginning in 2028
- Provides a temporary increase to the Medicare payments to physicians and other clinicians of 2.5% for services provided between January 1, 2026, and January 1, 2027
- Exempts all orphan-only drugs from Inflation Reduction Act (IRA) price controls, regardless of whether they treat one or multiple rare diseases, and specifies that the countdown to negotiation eligibility does not begin until a drug is approved for non-orphan use
- Creates a $50 billion fund to provide relief to rural hospitals adversely affected by Medicaid reductions, appropriated over five years from 2028 to 2032
- Prohibits state Medicaid programs from covering individuals unlawfully present in the U.S., except for certain emergency services, based on new mandates for citizenship, immigration status, and work verification
It’s also important to note that the following topics were NOT addressed in the final package:
- Provisions related to PBM reform, including spread pricing and mandatory NADAC reporting
- Codification of the President’s executive order seeking Most Favored Nation (MFN) status for drug pricing
LH: Beth, it looks like that’s all the time that we have for today. I can’t thank you enough for the time, effort, and commitment that your team continues to give to staying engaged and advocating for our customers every day.
BM: And thank you for your partnership, Lisa. We will continue to provide proactive perspectives and strive to remain a reliable resource for our customers, monitoring and proactively shaping congressional and administrative activity, providing updates on implications, and sharing our expertise to shape public policy in support our customers and their patients.
Thank you, Beth and Lisa, for providing valuable insights into the current legislative landscape and the ongoing efforts of Cencora and our industry partners to support community care. We remain dedicated to advocating on behalf of our customers and enabling quality, affordable patient care.
Sources
1. https://www.cms.gov/files/document/pharmacy-and-dispensing-entity-mtf-faq.pdf
2. https://www.congress.gov/bill/119th-congress/house-bill/1/text
3. https://www.cbo.gov/publication/61570
*While Cencora is committed to supporting our customers in understanding OBBBA’s health policy provisions, we cannot make any statements or provide guidance assessing the impact of tax provisions included in OBBBA.
