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The Medicare Drug Price Negotiation Program Is Underway

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This week, the Department of Health and Human Services (HHS) released a timeline for the Inflation Reduction Act’s (IRA) Medicare Drug Price Negotiation Program. This program implements Medicare’s new authority to directly negotiate prescription drug prices. Through the program, Medicare will have the ability to negotiate prescription drug prices with the goal of lowering the cost of the most expensive drugs for people with Medicare Parts B and D. In addition, the Centers for Medicare & Medicaid Services (CMS), the agency that will handle most aspects of the negotiation, released a memo outlining additional implementation steps, including opportunities for public feedback.

Before the first round of Medicare-negotiated drug prices takes effect in 2026, CMS must establish the program and its pricing mechanisms. The agency is laying the groundwork now by collecting data and public feedback on various issues, including which drugs are statutorily eligible for negotiation; manufacturer costs including research, development, production, and distribution; market data; revenue and sales; alternative therapies; and processes to negotiate, monitor, enforce decisions, and resolve disputes. CMS will be drafting guidance for public comment early this year and must choose which drugs will be subject to negotiation by September 1, 2023.

At the same time, the agency must educate the public about the Medicare Drug Price Negotiation Program as well as other landmark changes made in the IRA. Those include modernizing the Part D benefit, establishing an out-of-pocket cap on prescription drug costs, easing access to the Low-Income Subsidy (LIS) program, and making vaccines and insulin more affordable for millions.

At Medicare Rights, we look forward to the implementation process. We will continue to engage wherever possible to bring the perspective of people with Medicare to these conversations, communications, and decisions. We will also continue to work to build on the successes of the IRA, to strengthen access and affordability for all.

Read the timeline for the Medicare Drug Price Negotiation Program.

Read the memo for more information about public feedback.

Read more about the IRA.

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