CMS Final Rule Strengthens Supports Lasting Drug Savings

CMS issued a final rule establishing a permanent framework for the Medicare Drug Price Negotiation Program, with negotiated prices taking effect beginning in 2029. The rule is published at Federal Register docket 2026-22792 and governs the fourth cycle of negotiations and beyond. By February 1, 2027, CMS will select up to 20 additional negotiation-eligible drugs covered under Medicare Part D and/or payable under Medicare Part B, as well as identify drugs for renegotiation, for the fourth negotiation cycle. The rule provides manufacturers and program participants a defined timeline and process for price applicability year 2029. The rule finalizes a policy on fixed combination drugs that CMS determines are new formulations of existing drugs. The policy is designed to prevent primary manufacturers from shifting patients to a new formulation to circumvent application of the maximum fair price (MFP) that would otherwise apply to those patients under the existing drug. The rule implements the Temporary Floor for Small Biotech Drugs as required by statute, prohibiting CMS from offering or accepting a counteroffer for an MFP below a specified statutory floor for certain eligible Small Biotech Drugs for initial price applicability years 2029 and 2030. Two additional policies affecting the Part D benefit are codified: Part D plans must include selected drugs for which an MFP is in effect on their formularies, and negotiated prices paid by plans to dispensing entities are capped at the MFP plus applicable dispensing fees.