The Medicare drug price negotiation program is likely going to look a bit different for round three.
The program, which was established under the 2022 Inflation Reduction Act (IRA), allows the Centers for Medicare and Medicaid Services (CMS) to directly negotiate prices for a set number of Medicare Part D drugs with pharmaceutical manufacturers.
The first round of negotiated prices was released in August 2024 and is scheduled to go into effect Jan. 1, 2026. The list of the next 15 drugs slated for negotiations was unveiled in January, with new prices set to take effect in 2027.
While the first two rounds included only Part D drugs, CMS issued draft guidance on May 12 saying it plans to include for the first time Part B drugs (which are administered by doctors in a clinic or hospital), and that it wants to renegotiate prices for some drugs from the first two rounds. Part B drugs and renegotiations are both required under the IRA.
“CMS is committed to ensuring that Americans with Medicare have access to affordable, lifesaving medications,” Medicare’s Deputy Administrator and Director Chris Klomp said in a statement on May 12. “This draft guidance is critical to creating a transparent, competitive, and fair prescription drug market that puts American patients first.”
Some changes to the program may be coming as well, as the agency said it was looking for ideas on how to increase “transparency” in the negotiation process and reduce the “administrative burden” for drugmakers.
Some drugs get a do-over. CMS will identify drugs from the first two rounds for renegotiations, such as “those with new indications, material changes to negotiation factors, and changes in monopoly status,” according to the agency’s draft guidance.
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The agency plans to look at “available information” on the drugs to determine whether a renegotiated price would result in a 15% or greater change from the current price and whether that new figure would have a “significant impact” on Medicare, according to a fact sheet.
CMS plans to announce the list of the 15 drugs to be included in round three as well as drugs eligible for renegotiation by February 2026. Negotiations would proceed in 2026, and updated prices would take effect at the start of 2028.
The draft guidance won’t be finalized until after the 45-day public comment period concludes on June 26, with the final guidance expected in early fall 2025.
Zooming out. CMS’s draft guidance came the same day President Donald Trump signed an executive order aiming to lower drug prices closer to what other countries pay.
Under the order, Department of Health and Human Services Secretary Robert F. Kennedy Jr. is directed to establish a way for patients to buy medications straight from drugmakers and take “aggressive measures” to lower drug costs and “end anticompetitive practices,” Healthcare Brew previously reported.
The order also instructs the US trade representative and secretary of commerce to “take action” against other countries deemed to be “purposefully and unfairly” undercutting market prices or driving price hikes in the US.