HHS Sets Key Dates for Medicare Drug Price Negotiations

Lowering the cost of prescription drugs is a key component of the Inflation Reduction Act.

The federal government on Wednesday made public its timetable for the first round of its ballyhooed Medicare Drug Price Negotiation Program.

In a conference call Wednesday morning with reporters, Health and Human Services Secretary Xavier Becerra says the Centers for Medicare & Medicaid Services will publish the first 10 high-cost Medicare Part D drugs picked for negotiations on Sept. 1. The "negotiated maximum fair prices" for the drugs to be announced on Sept. 1, 2024, and the prices will take effect on Jan. 1, 2026.

Following the outline laid out in the Inflation Reduction Act, CMS will pick another 15 Part D drugs for 2027, 15 more Part B or Part D drugs for 2028, and 20 more Part B or Part D drugs for each year after that.

Lowering the cost of prescription drugs is a key component of the Act, which President Joe Biden signed into law in August, 2022. It gives CMS, for the first time in history, the authority to set drug prices, which Becerra says will lower out-of-pocket costs for millions of Medicare enrollees.

"Thanks to the Inflation Reduction Act, we finally have the authority to get American families the lower prescription drug costs they deserve," Becerra says. "Today we are releasing our plan for how we will implement Medicare drug price negotiation under this landmark law — and we will be transparent and aggressive in implementation every step of the way."

The program is fiercely opposed by the pharmaceutical industry. Pharmaceutical Research and Manufacturers of America (PhRMA) President / CEO Stephen J. Ubl in August blasted HHS’s newly bestowed authority, calling it "a partisan set of policies that will lead to fewer new treatments and doesn’t do nearly enough to address the real affordability problems facing patients at the pharmacy."

"We will explore every opportunity to mitigate the harmful impacts from the unprecedented government price setting system being put in place by this law," Ubl said. "We will continue to advocate for policies that give patients better and more affordable access to lifesaving treatments and for a system that supports innovation."

CMS Administrator Chiquita Brooks-LaSure says the negotiations will not be done in a vacuum, and that her agency "will engage with the public early and often," including Medicare and consumer advocates, drug makers, providers, pharmacies, and Medicare Advantage and Part D plans.

"We are proactively seeking feedback and insights from a broad range of interested parties throughout implementation of this historic law," she says. 

Meena Seshamani, MD, CMS deputy administrator and director of the Center for Medicare, says public feedback will play a critical role in the successful implementation of the new law.

"Through this detailed timeline, we offer stakeholders the predictability they need to contribute to our implementation efforts," Seshamani says. "We want the public to know when and how they can make their voices heard on forthcoming policies."

IRA Savings Touted

Becerra also notes that Medicare enrollees are already feeling the financial benefits from several provision of the Inflation Reduction Act, including: free preventive Tdap and shingles vaccines; and a $35 monthly cap on out-of-pocket costs insulin.      

In addition, the IRA requires drug makers to provide rebates to Medicare for drug prices that outpace inflation. That mandate took effect on Oct. 1, 2022 for Part D drugs, and Jan. 1, 2023 for Part B.

The IRA also authorized health insurance subsidies during its ongoing Marketplace Open Enrollment that the Biden administration says will enable 13 million people to save an average of $800 a year on health insurance premiums, and which has allowed four-out-of-five Healthcare.gov enrollees to find a plan for $10 or less after subsidies.