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The Centers for Medicare & Medicaid Services has issued revised guidance for implementation of the new Medicare Drug Price Negotiation Program, perhaps in response to the four lawsuits challenging the program. The first round of negotiations will occur in 2023 and 2024, resulting in prices that will be effective beginning in 2026.
"The Inflation Reduction Act and Medicare drug price negotiation allow CMS to better protect the health of people with Medicare by ensuring they can afford the prescription drugs they need," CMS Administrator Chiquita Brooks-LaSure said. "Negotiating with manufacturers on drug prices will improve access to lifesaving drugs for millions of people with Medicare while driving market competition and scientific innovation."
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The initial guidance was changed to improve transparency and foster an effective negotiation process, according to CMS. Changes include:
- Clarifications of how CMS will identify selected drugs. CMS will consider only active designations and approvals when evaluating a drug for the orphan drug exclusion.
- Revisions to and clarifications of the process applicable for participating drug companies of selected drugs. The confidentiality policy was revised to state that CMS will release information about the negotiation when the explanation of the maximum fair price is published and that drug companies may choose to publicly discuss the negotiation at their discretion.
- Inclusion of additional opportunities for drug companies and members of the public to engage with CMS during the negotiation process on the selected drugs through patient-focused listening sessions.
The new guidance does not substantially change provisions that several industry leaders said contradicted and unlawfully extended the Inflation Reduction Act, according to Reuters. Merck, Bristol Myers Squibb, the U.S. Chamber of Commerce and the Pharmaceutical Research and Manufacturers of America all have filed separate suits against the U.S. government over the program, claiming it is unconstitutional.
The confidentiality provision included in the original guidance released in March was one of several issues raised in the lawsuits. That guidance precluded drugmakers from talking about the negotiations and required them to eventually destroy data received from CMS.
Related: Pharma group files 4th lawsuit challenging Medicare's drug price negotiation plan
Both Merck and Bristol Myers argue in their suits that price negotiation would force drugmakers to sell to Medicare at huge discounts below market rates. "We are reviewing the guidance, but it does not and cannot change the fundamental constitutional problems with the statute that Congress enacted," Merck said in a statement.
PhRMA claimed that the price negotiation program violates the Eighth Amendment, which protects against excessive fines. "The very few substantive changes to the final guidance demonstrate CMS saw this as a box-checking exercise, not an opportunity to mitigate the negative impacts this price setting policy will have," according to the association.
CMS plans to publish a list of the first 10 Part D drugs selected for price negotiation by September 1; hold a series of patient-focused listening sessions on the selected drugs this fall; and invite the public to submit data on the selected drugs and therapeutic alternatives by October 2.
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Alan Goforth
Alan Goforth is a freelance writer in suburban Kansas City. In addition to freelancing for several publications, he has written a dozen books about sports and other topics.
