US CBO says orphan drug exemption could add $6 billion more to cost of ‘Big Beautiful Bill’

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(Corrects headline to say ‘exemption’, not ‘exmption’)

(Reuters) -The U.S. Congressional Budget Office said on Monday that new exemptions to drug price negotiations for several blockbuster cancer medicines under President Trump’s One Big Beautiful Bill Act will cost the government up to $6 billion more over the next decade.

The new estimate reflects updated information about the eligibility of Johnson & Johnson’s Darzalex, Merck’s Keytruda and Bristol Myers’ Opdivo for price negotiation, the Congress’ nonpartisan analyst said.

The act — this year’s budget reconciliation bill — delays or exempts drugs from the program if they have multiple rare-disease designations or gain approval for non-orphan uses. Previously, only drugs with a single rare-disease designation were excluded.

In July 2025, the CBO estimated that the cost of the change to the exemption would be $4.9 billion through 2034. Including the additional drugs, the CBO said the estimated cost would be $6.7 billion to $10.9 billion, depending on how the government decides to treat new formulations of the drugs.

The Inflation Reduction Act, signed into law in 2022, allowed Medicare to negotiate prices for some of the most costly drugs that the program covers for 66 million people. The CBO had estimated that the drug negotiation provisions in the Inflation Reduction Act would save $98.5 billion over its first 10 years (2022-2031).

The agency also noted that its estimate does not yet incorporate new U.S. Centers for Medicare & Medicaid Services’ guidance issued in September, which changes how Medicare Advantage spending is included in drug rankings for future negotiations.

(Reporting by Mrinalika Roy and Sneha S K in Bengaluru; Editing by Maju Samuel, Michael Erman in New York and Alan Barona)