chevron-down Created with Sketch Beta.
March 24, 2023

CMS Issues Guidance for 2026 Medicare Drug Price Negotiation Program and Prescription Drug Inflation Rebate Program

On March 15, 2023, CMS issued guidance detailing the parameters of the new Medicare Drug Price Negotiation Program for 2026. The Program was signed into law in August 2022 as part of the Inflation Reduction Act and allows CMS to negotiate maximum fair prices for certain high-priced prescription drugs with no generic or biosimilar competitors. The negotiations will affect only Medicare Part D for the first two years and Part B after that. CMS will issue which drugs are selected for negotiation in September 2023. The first set of 10 drug price negotiations are set to begin this year and continue through 2024 with results effective in 2026. The guidance includes CMS-issued qualifiers for potential drug products up for negotiation and exclusions for orphan drugs, low spend drugs, small biotech, and plasma-derived products. 

CMS aims to drive innovation and competition among drug companies through this negotiation process; however, the pharmaceutical industry is challenging how this will address the real drivers of healthcare spend and challenges of drug affordability for patients. This ability for Medicare to negotiate drug prices will draw significant interest from key industry stakeholders, particularly patients, patient advocates, pharmaceutical manufacturers, wholesalers, pharmacies, health plans, hospitals, and clinicians. CMS will consider public comments received by April 14, 2023, and will then issue revised guidance this summer for initial price applicability year 2026.

Also on March 15, HHS issued guidance detailing the requirements and procedures for the Medicare Prescription Drug Inflation Rebate Program. CMS also announced reduced Part B beneficiary coinsurances for 27 prescription drugs, including Humira, from April 1 – June 30, 2023.

The material in all ABA publications is copyrighted and may be reprinted by permission only. Request reprint permission here.