CMS Proposes Strengthening Medicare Drug Price Negotiations

The Centers for Medicare and Medicaid Services (CMS) has put forth a proposal to codify and strengthen the Medicare Drug Price Negotiation Program, established by the Inflation Reduction Act. Currently operating under nonbinding guidance documents, the program's requirements would be formalized into federal rules, making them more difficult to challenge. These codified rules are slated to direct negotiations beginning in 2029.

The proposal outlines the process for selecting drugs for negotiation and the requirements for manufacturers of selected medications. A key focus is addressing a potential loophole that drugmakers could use to avoid negotiations. This loophole involves theoretically altering a non-active ingredient or the administration method of a drug to market it as a new product, thereby making it ineligible for negotiation. To counter this, CMS proposes that two products with the same active ingredient can be considered for negotiation if they share the same license holder and the new formulation is intended solely to create a different route of administration.

The public will have a 60-day period to comment on the proposed rule, with the comment period set to close on August 17, 2026.