Medicare Drug Price Negotiation Program

The Centers for Medicare & Medicaid Services (CMS) recently announced the first 10 drugs covered under the Medicare Part D prescription drug benefit selected for negotiation. As a result of the Inflation Reduction Act (P.L. 117-169), Medicare, for the first time, has the ability to directly negotiate prices of certain high expenditure, single source drugs without generic or biosimilar competition, based on total gross covered prescription drug costs under Medicare Part D and other criteria as required by the law. The negotiations with participating drug companies will occur in 2023 and 2024, and any negotiated prices will become effective beginning in 2026. The negotiation process will consider the selected drug’s clinical benefit...

On June 30th, the Centers for Medicare and Medicaid Services (CMS) released revised guidance detailing the requirements and parameters of the new Medicare Drug Price Negotiation Program for the first round of negotiations, which will occur in 2023 and 2024. The agency received over 7,500 comments on the initial guidance which was released in March 2023. According to CMS, the agency is releasing the revised guidance with changes from the initial guidance to improve transparency and foster an effective negotiation process....