CMS Issues First Proposed Rule to Make Medicare Drug Price Negotiation Program Permanent

The Centers for Medicare & Medicaid Services (搜索)搜索该词条 (CMS) issued its first proposed rule on June 12, 2026, to implement the Inflation Reduction Act (搜索)搜索该药品 (IRA) Medicare Drug Price Negotiation Program, marking a pivotal shift from annual agency guidance to a permanent regulatory framework. The proposed rule, entitled "Medicare Drug Price Negotiation Program and Medicare Prescription Drug Benefit Program," will govern the administration of the program starting with Initial Price Applicability Year (IPAY) 2029.

"We are moving from annual updates to a permanent, predictable framework," said Dr. Mehmet Oz, CMS administrator. "This approach puts patients first, strengthens Medicare, and protects the innovation pipeline that delivers future cures."

Chris Klomp, director of Medicare and chief counselor of the U.S. Department of Health and Human Services, added: "This rule builds on that foundation by establishing clear, consistent rules of the road—giving patients, plans, pharmacies, and drug manufacturers the certainty they need as we continue to drive down costs."

Drug Selection and Aggregation Policies

Under the proposed rule, CMS will select 20 additional negotiation-eligible drugs covered under Part D or Part B for the fourth cycle of negotiations beginning in 2029 and beyond. The agency proposes to retain its aggregation approach for identifying qualifying single source drugs (QSSDs), under which all dosage forms, strengths, and formulations belonging to the same application holder with the same active moiety, active ingredient, or antigen component are aggregated.

In a notable change, CMS proposes publishing "a list of the up to 30 top negotiation-eligible drugs (including the up to 20 selected drugs) ranked by combined total expenditures under Part B and Part D," rather than the 50-drug list used in IPAY 2028. The agency states this change would "harmonize the request from interested parties for greater transparency into the process for selecting drugs with CMS operations."

Fixed Combination Drug Modifications

CMS is proposing a "narrow modification to the general fixed combination drug policy" that would aggregate products with different active moieties, active ingredients, or active antigen components when an application holder adds an additional component that "creates a new formulation and enables an alternative route of administration for the co-administered active moiety(ies)." The agency cites "a program integrity risk" in which manufacturers could potentially avoid selection or application of the maximum fair price (MFP) by marketing such new formulations.

Small Biotech Drug Provisions

For the first time, CMS has proposed policies for a temporary price floor for small biotech drugs applicable to IPAYs 2029 and 2030. By statute, small biotech drugs are no longer exempt from selection after IPAY 2028 but are instead subject to a price floor equal to 66% of the non-federal average manufacturer price (Non-FAMP) for 2021, increased by the Consumer Price Index for All Urban Consumers. Manufacturers must affirmatively apply for this temporary floor by submitting information demonstrating their drug meets the eligibility requirements.

Single-Administration Product Methodology

CMS is proposing a new methodology for calculating the 30-day equivalent supply for products typically administered once in a patient's lifetime—such as certain gene therapies, oncology products, or vaccines. For these products, CMS proposes setting a 30-day equivalent supply of "12," effectively treating them as if administered once per year. The agency describes this as facilitating "the necessary calculations in a manner that reasonably and accurately reflects such drugs' usage."

Compliance and Enforcement

The proposed rule strengthens enforcement mechanisms, including allowing CMS to bypass corrective action opportunities and instead directly issue notices of violation with civil monetary penalties (CMPs) for incomplete or inaccurate manufacturer data submissions. CMS also proposes shortening the window for manufacturers to submit suggestions of error for certain calculations from 21 days to 10 days.

Broader Drug Pricing Context

The Medicare Drug Price Negotiation Program intersects with multiple federal and state drug pricing policies. Drugs with MFPs are excluded from the government's proposed MFN-based pricing models (GLOBE and GUARD Models). The imposition of an MFP triggers statutory non-duplication requirements with the 340B drug pricing program, and MFPs are included in Medicaid "best price" calculations, which can increase Medicaid rebate obligations.

Next Steps

The public comment period closes 60 days after publication in the Federal Register. CMS also indicates it plans to "issue program guidance regarding MFP effectuation for 2028, including with respect to drugs payable under Part B" later this summer, with requirements for 2029 and beyond to be codified through future rulemaking.