HHS Unveils Guidance for Medicare Drug Price Negotiation Program

The price applicability is set to kick in for 2026.

Calling it a “historic” announcement, federal officials this week introduced guidance for the Medicare Drug Price Negotiation Program, which will give the federal agency the ability to negotiate lower prescription drug prices.

The move was made possible due to President Biden’s Inflation Reduction Act, intended to rein in healthcare and prescription drug costs. The U.S. Department of Health and Human Services (HHS) and Centers for Medicare & Medicaid Services (CMS) made the announcement in a joint press release, noting that they are now soliciting requests for public comment for the 2026 calendar year, the first year the negotiated prices will apply.

“For far too long, millions of Americans have had to choose between their prescription drugs and other monthly expenses,” HHS Secretary Xavier Becerra said in a statement. “President Biden is leading the fight to lower the cost of prescription drugs – and with the Inflation Reduction Act, we’re making historic progress. Through the Medicare Drug Price Negotiation Program, we will make sure seniors get a fair price on Medicare’s costliest prescription drugs, promote competition in the market, and ensure Medicare is strong for beneficiaries today and into the future.”

“Drug price negotiation is a critical piece of how this historic law improves the Medicare program,” CMS Administrator Chiquita Brooks-LaSure added. “By considering factors such as clinical benefit and unmet medical need, drug price negotiation intends to increase access to innovative treatments for people with Medicare.”

Officials noted that Medicare’s negotiation process will focus on key questions, including but not limited to the selected drug’s clinical benefit, the extent to which it fulfills an unmet medical need, and its impact on Medicare enrollees. As a result of negotiation, people with Medicare will have access to “innovative, life-saving treatments at costs that will be lower for both them and Medicare,” the press release read.

“Negotiation is a powerful tool that will drive drug companies to innovate to stay competitive, fostering the development of new therapies and delivery methods for the treatments people need,” said Meena Seshamani, MD, PhD, CMS Deputy Administrator and Director of the Center for Medicare. “This initial guidance is the next step in the extensive engagement CMS has had to date with interested parties, and we look forward to continuing to receive comment on key policy areas and engage with the public as we implement the Negotiation Program.”

Key dates for implementation include the following:

• By Sept. 1, CMS will publish the first 10 Medicare Part D drugs selected for initial price applicability year 2026 under the Medicare Drug Price Negotiation Program.
• The negotiated maximum fair prices for these drugs will be published by Sept. 1, 2024, and prices will be in effect starting Jan. 1, 2026.
• In future years, CMS will select for negotiation up to 15 more Part D drugs for 2027, up to 15 more Part B or Part D drugs for 2028, and up to 20 more Part B or Part D drugs for each year thereafter.

Comments received by CMS by April 14 will be considered for revised guidance, which will be released for the first year of negotiation this summer.

“CMS is committed to collaborating and engaging with the public in the implementation of the Inflation Reduction Act … (and is) working closely with patients and consumers, Medicare Part D plan sponsors and Medicare Advantage organizations, drug companies, hospitals and healthcare providers, wholesalers, pharmacies, and others,” the press release concluded. “Public feedback contributes to the success of the Medicare Drug Price Negotiation Program, and this initial guidance is one tool, among many, that CMS will use to ensure interested parties know when and how they can make their voices heard on implementation of this new drug law.”

Resources:

To view a fact sheet on the Medicare Drug Price Negotiation Program Initial Guidance, go online to: https://www.cms.gov/files/document/fact-sheet-medicare-drug-price-negotiation-program-initial-guidance.pdf

To read the Medicare Drug Price Negotiation Program Initial Guidance, go to: https://www.cms.gov/files/document/medicare-drug-price-negotiation-program-initial-guidance.pdf