Popping the Gross-to-Net Bubble, Part VI: The Future of Pharmaceutical Pricing

October 2, 2025

Pharmaceutical Commerce, Pharmaceutical Commerce - October 2025, Volume 20, Issue 5

From patent cliffs and government price controls, to self-pay models and staff-model HMOs, a look at the forces that could deflate the bubble—and those factors likely to keep it afloat a while longer.

This is the sixth and final installment in my “Popping the Gross-to-Net (GTN) Bubble” series. Over the past five articles, I’ve unpacked the inner workings of GTN, including how statutory and commercial rebates distort gross and net pricing; how pharmacy benefit managers (PBMs) and intermediaries incent and exploit pricing structures; mistakes made by manufacturers along the way and how they are now experimenting with new models to not just survive the construct set by payers but are seeking to evolve the market back to appreciate the science; and ensuring patients and plan sponsors regain their proper positions as the true economic buyers.

Now, it’s time to look ahead. What forces will actually deflate the bubble over the next five years? And what dynamics will continue to inflate it, keeping this distorted system alive for longer than many of us would like?

The forces deflating the GTN bubble

1. Switching from brands to generics and biosimilars as part of the patent cliff

The single-largest deflationary force between 2025 and 2030 is the loss of exclusivity (LOE) on nearly $400 billion in branded drug sales. Few events reshape market economics as dramatically as patent cliffs.

Flagship brands such as Humira and Stelara have already lost exclusivity, as have Copaxone 20 mg, Gilenya, Aubagio, and Tecfidera. For large general medicine products such as Eliquis, Xarelto, Jardiance, Januvia, Entresto, and Farxiga, losses of exclusivity are looming. While the pending maximum fair price (MFP) is definitely adding incremental confusion and pressure, the combination of the two are all providing early views into where the market is moving. Wholesale acquisition cost (WAC) prices are coming down; some are preempting their patent expiries by launching early authorized generics. The most significant aspect of the patent cliff is how I think new science will be treated as it comes into crowded drug classes with ubiquitous generic competition. I personally don’t see a bounce back.

2. Manufacturers leaving government programs

The second deflationary driver comes from the government’s own policies. We’ve seen this unfolding since the mid-1970s, but it has picked up pace in the last 15 years. I spoke with a Department of Health and Human Services (HHS) representative about five years ago, and the agency does believe its mission is to lower pricing, not just for government but for commercial plan sponsors and consumers. As of writing this in late August, 35 manufacturers—both brand and generic—have terminated their labeler codes with the Centers for Medicare & Medicaid Services, effectively walking away from Medicaid, the 340B Drug Pricing Program, and the Federal Supply Schedule (FSS) just between Oct. 1, 2025, and Jan. 1, 2026, joining the dozens that have already left. This should be especially concerning.

Why? For many pharmaceutical products and portfolios, the economics of selling to government programs no longer work for the science. The exposure from Medicaid unit rebate amounts, which ties to increasing 340B and FSS discount, now costs more than it is worth to keep on supporting them. These compulsory and aggressive price concessions, inflation penalties, and 340B discounts have crossed the line from painful to untenable. I predicted this very scenario when testifying before the Senate Subcommittee on Pharmaceutical Pricing in 2019, warning that if policymakers pushed too far, manufacturers would exit. That prediction is now reality. The political fallout will be significant, as patients, providers, and safety-net systems grapple with the consequences of fewer products available under government programs.

3. WAC price drops stemming from the IRA’s maximum fair price

The Inflation Reduction Act (IRA) introduced the MFP mechanism, which will reset economics in both the pharmacy and medical benefit by forcing pharma manufacturers to deliver a lower price to a pharmacy in order to be able to service the Medicare beneficiary at the negotiated rate. The complexity and financial exposure of selling at a high WAC and reimbursing or crediting pharmacy for a sizeable differential is risky.

For pharmacy benefit products, the first round of negotiated prices takes effect in January 2026. Conservative projections already estimate $30 billion in WAC reductions with only a portion of the products with announced price decreases, causing negative ripple effects for PBMs, pharmacies, distributors, and group purchasing organizations. These WAC decreases reduce the overall GTN bubble and also set pricing more in line with a self-pay price for some products.

For medical benefit, we assumed this area to be resilient to MFP. However, as we’ve dug deeper into it, because MFP discounts on Part B drugs will flow to the providers and into average sales price (ASP), the manufacturers’ desire to maintain a high WAC will dissipate. Since the mid-2000s, the pricing and reimbursement construct for medical benefit products was seen as a strong model against the GTN bubble and GTN erosion. From the way we’re reading the regulations, it appears the government is aware of the loophole and seeking to course-correct.

Expect oncology’s PD-1 inhibitors to be the first real test case. Depending on how aggressive the MFP is in relation to the then-current WAC of the product, we’d expect a WAC decrease would be needed to better align provider acquisition cost with the ASP base of reimbursement.

Another very concerning aspect of this artificial deflation is the fact it lowers the value for generics to come to market. A 50% WAC reduction for a brand as it arrives at LOE is a 50% reduction in the value of the generic market.

4. Self-pay and reduction/removal of copay assistance programs

Another deflationary force at play is the emergence of self-pay models, particularly for non-specialty therapeutics where the insurance-based access and channel tolls are simply unsustainable.

For many emerging pharma companies, paying rebates, distribution fees, affordability program costs, and pharmacy margins is no longer economically viable.

Patients are noticing, too. In categories such as hypertension, depression, and hyperlipidemia, insurance restrictions have effectively suppressed demand. After LOE, demand for the molecules has seen a 300% surge in utilization. With the simple removal of the payer-control mechanisms, it comes down to a pricing and volume equation. That raises the uncomfortable question: has insurance been supporting demand, or suppressing it?

A related GTN bubble item is copay support programs. Many manufacturers blindly set and follow the industry’s misplaced obsession with $0 copays. If patients can pay $100+ per month for vitamins, supplements, and even GLP-1s, why give away branded therapies for free? Building sustainable cash markets will require manufacturers to rethink the out-of-pocket cost differential between insurance and cash-based transactions.

5. The staff-model HMO growth

The final deflationary force may come from a rising staff-model HMO surge.

With Kaiser Permanente as the national model and UPMC as the model in Pennsylvania, when Kaiser Foundation Hospitals launched Risant Health in 2023, this nonprofit entity is designed to extend Kaiser’s value-based model beyond its traditional eight-state footprint.

Risant provides governance, strategic direction, and capital, while health system partners such as Geisinger contribute scale and community access. Think of Risant as a Trojan horse for the next generation of integrated care and more importantly, capitated care. By aligning payer and provider incentives under capitation, Risant has the potential to undercut both bloated hospital systems and profit-heavy commercial insurers.

Private equity is already eying the model as a platform for expansion. If Risant succeeds, it could dramatically reshape access and pricing management in US healthcare.

The forces still inflating the GTN bubble

For all these deflationary forces, one stubborn dynamic continues to keep the GTN bubble inflated: high-priced new product entrants.

Look at recent launches in immunology or multiple sclerosis. Despite all the noise about reform, manufacturers still introduce products at eye-popping WACs, with rebate structures designed to satisfy PBMs’ pass-through programs and benefit consultants. Plan sponsors, guided by consultants incentivized to preserve the rebate model, remain focused on “discounts off AWP (average wholesale price)” or “peer-class benchmarks”—illusions that mask the underlying distortion.

For infused products, the WAC-to-ASP alignment strategy remains alive and well. Providers are incentivized to use therapies where reimbursement covers not just the drug but a margin. Manufacturers know this and design pricing accordingly. As long as plan sponsors tolerate these dynamics, the inflationary pressures will remain.

Closing reflections

As I wrap up this six-part exploration of the gross-to-net bubble, one truth stands out: deflation and inflation will coexist through the end of this decade. Some cracks are widening—the patent cliff, government price setting, cash-pay models, and new care delivery platforms. But other forces, particularly high-priced launches and rebate-driven contracting, will keep the bubble afloat.

The real question isn’t if the bubble will pop—it’s where will it pop, in which sequence, and how much damage it will do when it does. Manufacturers risk margin compression, PBMs risk losing their role as gatekeepers, providers risk losing buy-and-bill economics, and patients risk even greater barriers to access.

My hope, and my challenge, is that manufacturers, payers, and policymakers use this moment to rethink pricing altogether. We need sustainable models that value science appropriately, ensure patient access, and restore transparency to the system. Because if we don’t chart that course ourselves, the market—and eventually the government—will do it for us. HHS has and is making that very clear.

About the Author

Bill Roth is General Manager and Managing Partner of IntegriChain’s consulting business, which includes Blue Fin Group, a strategy consulting company he started in 2001, and the IntegriChain advisory services business.