OBBBA and Medicaid: What Pharmaceutical Manufacturers Need to Know About Patient Access and Revenue Risk

October 21, 2026

The Budget Reconciliation Act of 2025, commonly referred to as H.R. 1 or the One Big Beautiful Bill Act (OBBBA), represents the most significant Medicaid policy shift since the Affordable Care Act.

For pharmaceutical manufacturers and life sciences companies, the implications extend beyond potential Medicaid enrollment loss. Federal and state implementation decisions could affect medication access, adherence, therapy initiation, product switching, patient-support programs, market access strategies, and revenue forecasting for millions of low-income Americans on Medicaid.

Download this issue brief to understand where Medicaid exposure is concentrated, which patients may remain protected, and how state-level implementation could affect pharmaceutical access and financial risk.

Why this matters for pharmaceutical manufacturers

The impact of OBBBA will not be uniform across products, therapeutic areas, patient populations, or states.

Coverage loss will receive significant attention, but churn among beneficiaries who remain eligible may be equally disruptive. Renewal timing, verification processes, beneficiary outreach, medically frail exemptions, electronic eligibility checks, and other state decisions could interrupt coverage even for patients who continue to qualify for Medicaid.

Coverage loss and administrative churn may lead to:

• Interruptions in medication adherence
• Delayed therapy initiation
• Changes in product utilization and switching behavior
• Greater pressure on patient-support programs
• New challenges for market access and stakeholder engagement
• Increased uncertainty in Medicaid revenue forecasting

The current Medicaid system was not designed for the scale and complexity of implementation ahead.

Key findings from the report

HMA’s analysis of 100% Medicaid/T-MSIS claims found approximately $118.6 billion in gross Medicaid pharmacy spending in 2024, before rebates.

Of that amount:

• $42.4 billion was associated with Expansion adults, the population most affected by OBBBA.
• Expansion adults represented 35.8% of Medicaid pharmacy spending.
• 21% of Expansion-adult pharmacy spending was concentrated in five brands.
• Exposure is concentrated in therapeutic areas where continuity of treatment is especially important, including diabetes, behavioral health, HIV, oncology, and autoimmune disease.

These findings indicate that Medicaid financial risk may be highly concentrated by product, therapeutic category, eligibility pathway, and state.

Three questions pharmaceutical and life sciences executives should be asking

1. How much Medicaid exposure do we have?

Organizations need a clear view of covered lives, utilization, and financial exposure at the product, therapeutic, eligibility, and state levels.

2. Which patients may lose coverage, and which may remain protected?

State decisions regarding medically frail exemptions, self-attestation, electronic verification, outreach, and compliance processes will influence both coverage loss and administrative churn.

3. How should we engage stakeholders?

Pharmaceutical manufacturers will need to consider how to work with federal regulators, state agencies, Medicaid managed care organizations, providers, advocacy organizations, and patient groups to support continuity of care and reduce avoidable treatment disruption.

What this issue brief covers

This report examines:

• The potential Medicaid revenue exposure created by OBBBA
• The relationship between Medicaid coverage loss, churn, and pharmaceutical access
• How risk varies by product, therapeutic area, patient population, and state
• State-level implementation of work requirements and eligibility processes
• Medically frail exemptions and beneficiary self-attestation
• Implications for patient-support programs and market access strategy
• Opportunities for stakeholder engagement to support continuity of care

Move from broad projections to actionable Medicaid intelligence

National estimates alone will not show where pharmaceutical manufacturers face the greatest exposure.

A more useful approach combines policy intelligence with state-, patient-, and product-level analysis to help organizations:

• Prioritize states with the greatest patient access risk
• Identify therapies and populations most vulnerable to disruption
• Evaluate alternative exemption and implementation scenarios
• Tailor patient education, outreach, and support strategies
• Inform engagement with states, health plans, providers, and advocacy organizations
• Strengthen continuity-of-care planning
• Improve Medicaid revenue forecasting and contingency planning

OBBBA implementation will be shaped by state and federal decisions. Manufacturers that understand those decisions early will be better positioned to anticipate access challenges, focus resources, and support patients through a changing Medicaid environment.

FAQ

What is OBBBA?

OBBBA is the One Big Beautiful Bill Act, also referred to as the Budget Reconciliation Act of 2025 or H.R. 1. The law includes Medicaid provisions that may affect eligibility, enrollment, work or community engagement requirements, verification processes, and state implementation.

How could OBBBA affect pharmaceutical manufacturers?

OBBBA could affect pharmaceutical manufacturers through Medicaid coverage loss, administrative churn, changes in medication adherence, delayed therapy initiation, product switching, patient-support needs, market access conditions, and revenue forecasting uncertainty.

What is Medicaid churn?

Medicaid churn occurs when eligible beneficiaries experience temporary or repeated coverage interruptions, often because of renewal, verification, reporting, or administrative processes. Churn can disrupt medication access even when a person remains eligible for Medicaid.

Which pharmaceutical products may face the greatest risk?

Risk will vary by product, therapeutic area, patient population, eligibility pathway, and state. HMA’s analysis indicates that exposure is concentrated in a relatively small number of products and includes therapeutic areas such as diabetes, behavioral health, HIV, oncology, and autoimmune disease.

Why do medically frail exemptions matter?

Medically frail exemptions may protect certain Medicaid beneficiaries from work or community engagement requirements. State definitions, diagnostic code lists, self-attestation policies, and verification processes will influence which patients remain protected and how manufacturers assess access risk.

How can pharmaceutical manufacturers prepare for OBBBA implementation?

Manufacturers can begin by quantifying Medicaid exposure, modeling state-specific coverage and exemption scenarios, identifying vulnerable patient populations and therapies, evaluating continuity-of-care risks, and developing stakeholder engagement strategies.

Download