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March 15, 2023

HHS Releases Initial Guidance for Medicare Drug Price Negotiation Program for Price Applicability Year 2026

On March 15, the Centers for Medicare and Medicaid Services (CMS) issued initial guidance on the implementation of the Medicare Drug Price Negotiation Program. The Negotiation program was created by the Inflation Reduction Act and authorizes CMS to negotiate Maximum Fair Prices (MFP) for certain high expenditure, single source drugs and biological products.

This initial guidance describes how CMS intends to implement the Negotiation Program for price applicability year 2026 (January 1, 2026 to December 31, 2026), including:

  • Identification of selected drugs for initial price applicability year 2026, including identification of qualifying single source Part D drugs, identification of negotiation-eligible Part D drugs, selection of drugs for negotiation, and publication of the Selected Drug List
  • Requirements for manufacturers of Selected Drugs for initial price applicability year 2026
  • Negotiation factors
  • Negotiation process
  • Removal from the Selected Drug List
  • MFP eligible individuals
  • Manufacturer compliance and oversight
  • Civil monetary penalties
  • Part D formulary inclusion of Selected Drugs
  • Application of Part B and Part D prescription drug inflation rebates

CMS is seeking comment on several elements in today’s guidance by April 14, 2023. CMS anticipates issuing revised guidance for the first year of negotiation in Summer 2023.

Per the guidance, topics that are not relevant to the Negotiation Program for  2026, such as the selection of Medicare Part B drugs and renegotiation, will not be addressed in this guidance. CMS will provide additional information in the future related to implementation for price applicability years 2027 and beyond.

To view the press release from CMS, CLICK HERE.
To view the fact sheet from CMS, CLICK HERE.
To read the full text of the Initial Guidance, CLICK HERE.

Additionally, earlier today, HHS released a list of the first Part B drugs that will be subject to Medicare inflation rebates and have lower coinsurance payments starting April 1, 2023. The initial tranche of 27 Part B drugs is also noted in the quarterly ASP public file. The Part B drugs impacted by this coinsurance adjustment may change quarterly.

To view the press release on the Part B inflation rebate, CLICK HERE.
To view the factsheet on the Part B inflation rebate, CLICK HERE.
The April 2023 ASP file is available HERE.