CMS has finalized a rule that sets ongoing policies for the Medicare Drug Price Negotiation Program, starting with negotiated prices that take effect in 2029.
The agency said the rule is designed to give drugmakers in the program a clearer, more predictable process going forward, according to a Nov. 5 news release.
CMS plans to pick up to 20 additional Part D or Part B drugs for the program’s fourth negotiation cycle by Feb. 1, 2027. It may also select previously negotiated drugs for renegotiation.
“This rule provides additional tools to help CMS negotiate better deals, achieve greater savings for taxpayers and beneficiaries, and improve health outcomes for seniors who rely on the Medicare Prescription Drug Program,” CMS Administrator Mehmet Oz, MD, said in the release.
The American Hospital Association urged CMS in Aug. 17 comments on the proposed rule to require drugmakers to provide the maximum fair price at the point of sale rather than through retrospective rebates. The group said a rebate approach would burden hospitals, especially rural, critical access and safety-net facilities, and could pave the way for a similar shift in the 340B program.
The final rule also includes these four provisions:
1. Fixed combination drugs: CMS finalized its proposed approach to certain fixed combination drugs that it considers new formulations of existing drugs. The agency said the policy is meant to keep manufacturers from moving patients to a new formulation to get around the maximum fair price.
2. Small biotech floor: As required by law, CMS cannot offer or accept a counteroffer below a specified price floor for certain eligible small biotech drugs in the 2029 and 2030 initial price applicability years.
3. Formulary requirements: Part D plans must cover selected drugs with a maximum fair price in effect on their formularies.
4. Pharmacy payment limits: The negotiated prices Part D plans pay pharmacies and other dispensing entities are capped at the maximum fair price plus any dispensing fees.
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