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March 24,2023
Medicare Drug Price Negotiation Program for CY2026 Initial Guidance Released
The Inflation Reduction Act of 2022 (IRA) (signed into law on August 16, 2022) included a provision to establish to negotiate maximum fair prices (MFPs) for certain high expenditure, single source drugs and biological products. Sections 11001(c) and 11002(c) of the IRA have been deemed the Medicare Drug Price Negotiation Program (Negotiation Program). On March 15, 2023, the Centers for Medicare & Medicaid Services (CMS) issued initial guidance for implementation of the Negotiation Program for initial price applicability year 2026. CMS is seeking comments by April 14, 2023, and those comments can be submitted to IRARebateandNegotiation@cms.hhs.gov. The Identification of Selected Drugs for Initial Price Applicability Year 2026 guidance (section 30 of the memorandum) is considered final and without a comment solicitation (with the exception of the Small Biotech Exception Information Collection Request (ICR)) so that CMS can implement the Negotiation Program is timely.
The CMS news alert as well as a CMS timeline of events can be found here. CMS’ initial guidance included a 91-page memo entitled ‘Medicare Drug Price Negotiation Program: Initial Memorandum, Implementation of Sections 1191 – 1198 of the Social Security Act for Initial Price Applicability Year 2026, and Solicitation of Comments’. The keys of this guidance, as outlined by CMS from Sections 11001(c) and 11002(c) of the IRA, include the following:
- Publication of a list of selected drugs.
- Establishment of agreements with manufacturers of selected drugs
- Negotiation and, if applicable, renegotiation of MFPs for such selected drugs
- Publication of the MFPs for selected drugs
- Deployment administrative duties and compliance monitoring
- Manufacturer monitoring and oversight requirements and the enforcement of civil monetary penalties (CMPs)
- Establishment of certain limitations on administrative and judicial review relevant to the Negotiation Program
- Part D Formulary requirements around the inclusion of selected drugs
The selected drug publication date for initial price applicability year 2026 is September 1, 2023, and will be located online here.
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