CMS has finalized several changes for the third round of Medicare drug price negotiations.
The changes, outlined in a final guidance issued Sept. 30, include expanded exclusions for orphan drugs and a new framework for incorporating Medicare Advantage encounter data into drug selection calculations under Part B.
“CMS is working to lower healthcare and prescription drug costs for Americans while ensuring the negotiation process is open, fair and responsive to changes in the market and patient needs,” CMS Administrator Mehmet Oz, MD, said in a Sept. 30 news release. “We’ve listened to stakeholders, and their feedback helped us make the Negotiation Program more transparent, more workable for manufacturers and more responsive to the needs of Medicare beneficiaries.”
Four notes:
1. CMS expanded its orphan drug exclusion, allowing more medications to avoid price negotiations. The update is intended to preserve incentives for drugmakers to develop treatments for rare conditions affecting smaller populations.
2. The agency also updated how it will calculate total expenditures for drugs under Medicare Part B, now incorporating both Medicare Advantage encounter data and traditional fee-for-service claims data to create a fairer and more accurate picture of drug spending.
3. Vaccines remain eligible for negotiation, but CMS will base eligibility on the vaccine’s antigen components — a move intended to reflect the unique dynamics of vaccine development.
4. CMS will announce up to 15 medications eligible for the third round of price negotiations by Feb. 1, 2026, with negotiated prices set to take effect in 2028. The agency will also announce any drugs selected for the first round of renegotiations at this time.
Learn more here.
At the Becker's 11th Annual IT + Revenue Cycle Conference: The Future of AI & Digital Health, taking place September 14–17 in Chicago, healthcare executives and digital leaders from across the country will come together to explore how AI, interoperability, cybersecurity, and revenue cycle innovation are transforming care delivery, strengthening financial performance, and driving the next era of digital health. Apply for complimentary registration now.
