CMS Sets Stage for Next Round of Drug Negotiations

October 04, 2024

CMS has released new guidance outlining the process for the second cycle of negotiations under the Medicare Drug Price Negotiation Program.

The guidance also summarizes how CMS will help ensure Medicare beneficiaries can access drugs at the negotiated prices from the first and second cycles when those prices become effective during 2026 and 2027.

“We are continuing to implement the prescription drug law thoughtfully, prioritizing engagement with all interested parties, and ensuring the process is as transparent and inclusive as possible,” said Dr. Meena Seshamani, MD, PhD, CMS deputy administrator and director of the Center for Medicare.

Here’s what you need to know:

• Timeline:  CMS will announce up to 15 additional drugs covered by Part D for the second cycle of negotiations by February 1, 2025.
  • This second cycle of negotiations with drug companies will occur during 2025.
  • Final negotiated prices for this second set of drugs would be effective January 1, 2027.
• New elements:  CMS plans to engage with a “Medicare Transaction Facilitator” for data exchange and the optional facilitation of payments to ensure that eligible individuals with Medicare and the pharmacies have access to the maximum fair prices.
• Coming soon:  Starting in the spring, CMS will host roundtable events and a town hall meeting to solicit feedback from interested parties.
• Round one:  The new list prices for the 10 Medicare Part D drugs from the first round of negotiations will go into effect beginning January 1, 2026.
  • The products—which include popular blood thinners, diabetes medications, and heart failure drugs—accounted for about 20 percent ($56.2 billion) in Part D costs.
• Quotable:  “As we approach the second cycle of negotiations, we continue to focus on ensuring people with Medicare prescription drug coverage have access to the innovative cures and therapies they need at prices they can afford,” Seshamani said.

A fact sheet and the final guidance from CMS are available online.