Medicare will have the ability to negotiate lower prescription drug prices because of the Inflation Reduction Act. The U.S. Department of Health and Human Services (HHS), through the Centers for Medicare & Medicaid Services (CMS), issued initial guidance detailing the requirements and parameters—including requests for public comment— on key elements of the new Medicare Drug Price Negotiation Program for 2026, the first year the negotiated prices will apply.
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.
This initial guidance is one of a number of steps CMS laid out in the Medicare Drug Price Negotiation Program timeline - PDF for the first year of negotiation. The initial program guidance details the requirements and procedures for implementing the new Negotiation Program 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, 2023, 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, as outlined in the Inflation Reduction Act.
