CMS releases guidance for Medicare Drug Price Negotiation Program that it expects to revise by summer

Photo: Comezora/Getty Images

The Centers for Medicare and Medicaid Services on Wednesday released the parameters for the first year of prescription drug negotiations to lower prices in Medicare. The negotiations will affect only Medicare Part D for the first two years for ten drugs during the first year and 15 in the second year, CMS said.

After that, Part B gets included. The first year the negotiated prices will apply is 2026.

CMS is seeking comments on its guidance. Comments received by April 14 will be considered for revised guidance. CMS said it anticipates issuing revised guidance for the first year of negotiation this summer.

WHY THIS MATTERS

CMS is releasing its initial guidance for how Medicare intends to use its new authority to effectively negotiate with drug companies for lower prices on selected high-cost drugs. 

The negotiation process will focus on key questions, including but not limited to the selected drug's clinical benefit, the extent to which it fulfills an unmet medical need and its impact on people who rely on Medicare, CMS said. 

The initial program guidance details the requirements and procedures for the first set of negotiations, which will occur during 2023 and 2024 and result in prices effective in 2026. 

Key dates for implementation include:

• By September 1, CMS will publish the first 10 Medicare Part D drugs selected for initial price applicability year 2026 under the Medicare Drug Price Negotiation Program.
• The negotiated maximum fair prices for these drugs will be published by September 1, 2024 and prices will be in effect starting January 1, 2026.
• In future years, CMS will select for negotiation up to 15 more Part D drugs for 2027, up to 15 more Part B or Part D drugs for 2028, and up to 20 more Part B or Part D drugs for each year after that.

THE LARGER TREND

This initial guidance is one of a number of steps CMS has laid out in the Medicare Drug Price Negotiation Program. Earlier this week, CMS announced 27 prescription drugs for which Part B beneficiary coinsurances may be lower starting April 1 through June 30.

The initiatives are due to measures passed in the Inflation Reduction Act, which gave Medicare, for the first time, the ability to negotiate lower prescription drug prices.

ON THE RECORD

"Negotiation is a powerful tool that will drive drug companies to innovate to stay competitive, fostering the development of new therapies and delivery methods for the treatments people need," said Dr. Meena Seshamani, CMS deputy administrator and director of the Center for Medicare. "This initial guidance is the next step in the extensive engagement CMS has had to date with interested parties, and we look forward to continuing to receive comment on key policy areas and engage with the public as we implement the Negotiation Program."

PhRMA spokesperson Brian Newell said, "Despite the rhetoric we always hear, the administration's own report shows that prices for the vast majority of Part B medicines are not skyrocketing. Over 95% of Part B treatments were not impacted by the inflation penalty. Across the board, Part B medicines have consistently been less than 5% of overall government spending in Medicare, and spending on medicines continues to be eclipsed by spending on other hospital costs in the program. The administration continues to spin a false narrative to score political points, instead of addressing the real drivers of healthcare spending and the real challenges patients face affording their life-saving treatments."    
 

Twitter: @SusanJMorse
Email the writer: SMorse@himss.org
 

Aimee Cardwell will offer more detail at her HIMSS23 session "The Defender's Advantage: Winning by Using the High Ground." It is scheduled for Tuesday, April 18, at 3-4 p.m. CT at the South Building, Level 4, in room S406 B.