Medicare’s drug price negotiation program is moving into its third round of selections, according to a recent announcement by the Department of Health and Human Services (HHS). As the Biden-era program continues to progress, changes are on the horizon for the next 15 drugs that will be up for negotiation.
The Centers for Medicare and Medicaid Services (CMS) have already finalized prices for the first 10 drugs that were included in the program, set to take effect next year. Currently, negotiations are ongoing with drug manufacturers for medications slated to be part of the second cycle, which is scheduled for implementation in 2027.
Looking forward, the administration is gearing up for round three of negotiations. Despite other efforts by President Donald Trump to address drug pricing, such as a recent executive order, the administration plans to continue the negotiation program in alignment with the original provisions of the Inflation Reduction Act.
While the Trump administration has made some concessions to the pharmaceutical industry, including increased transparency in the negotiation process and more opportunities for communication with CMS, the program remains focused on lowering drug prices for Medicare beneficiaries.
Here are the latest updates on the negotiation program:
### Round three on the way
CMS will announce the 15 drugs selected for negotiations in the 2028 plan year by February 1, 2026. The agency has also released draft guidance outlining its objectives to enhance transparency, prioritize high-cost drugs for Medicare, and minimize disruptions to innovation.
A new feature of the third round is the inclusion of Medicare Part B drugs, typically administered in a clinical setting. Additionally, small biotech companies will have the opportunity to apply for exemptions for certain drugs, including Part B medications.
The third cycle will also introduce the ability for CMS to renegotiate prices from the first two plan years for the first time. This may include drugs with new indication approvals or changes in monopoly status. The draft guidance is open for public comment until June 26.
### Second round advances
While preparations for the third round are underway, negotiations for the second round are ongoing. Fifteen more Medicare Part D drugs were selected in January for the 2027 plan year, including Novo Nordisk’s popular GLP-1 weight loss and diabetes drugs, Ozempic and Wegovy.
CMS has already reached agreements with all manufacturers involved in the second round negotiations, set to conclude by November 1. Stakeholders, including clinicians and researchers, have provided feedback on the selected drugs and the negotiation process through town hall meetings.
### Regulatory confusion
Alongside the negotiation program, President Trump has reintroduced a “most favored nation” policy in a recent executive order. This policy aims to enable Americans to purchase drugs directly from manufacturers at prices comparable to those in other countries. The administration believes that savings from the Inflation Reduction Act negotiations have not been sufficient.
The relationship between the most favored nation policy and Medicare price negotiations remains unclear. The administration appears to favor the most favored nation approach over the negotiation program, signaling discontent with the price reductions achieved so far.
Furthermore, the Trump administration is advocating for reduced regulations and has issued an executive order requiring agencies to eliminate 10 regulations for every new one implemented. HHS and the FDA have initiated a public request for information to identify unnecessary regulations to be removed.
In conclusion, as the negotiation program progresses into its third round and regulatory changes are implemented, the landscape of drug pricing and regulation in the healthcare industry continues to evolve. Stay tuned for further updates on Medicare drug price negotiations and regulatory developments.
