US Gov’t Codifies Medicare Drug Price Negotiation Program
The US Centers for Medicare & Medicaid Services (CMS) has issued a final rule that codifies policies established in guidance documents for the Medicare Drug Price Negotiation Program for initial price applicability year 2029 and beyond. The rule goes into effect December 5, 2026.
The Medicare Drug Price Negotiation Program, which was enacted under the Inflation Reduction Act (IRA) of 2022, authorizes and requires the US government to negotiate with pharmaceutical companies prices for certain prescription drugs under Medicare, the US federal health insurance program for people 65 or older.
Under the Medicare Prescription Drug Negotiation Program, the US government directly negotiates with pharmaceutical companies the prices of certain high-expenditure (defined by levels of Medicare spending) and single-source drugs without generic or biosimilar competition. In all, 40 prescription drugs have been subject to price negotiations under the Negotiation Program since IRA was enacted in 2022—the latest 15 drugs subject to price negotiation were selected in January (January 2026) with the negotiated prices going into effect January 1, 2028. In two earlier rounds of price negotiations, the prices of 25 other drugs have already been negotiated, with the negotiated prices of 10 drug already in effect in 2026, and the negotiated prices of 15 more drugs going into effect next year (2027).
For initial price applicability years 2026 through 2028 of the Negotiation Program, statute directed CMS to implement the Negotiation Program through program instruction and other forms of program guidance. With this authority expiring, CMS is codifying the Negotiation Program for 2029 and beyond. In addition to codifying these policies, CMS is establishing new policies to continue implementation of statutory provisions under the Negotiation Program as well as finalizing revisions or clarifications to certain policies previously established to incorporate lessons learned from the initial implementation of the program.
