Medicare Drug Price Negotiation
Medicare Drug Price Negotiation
Because of the prescription drug law, known as the Inflation Reduction Act, Medicare is able to negotiate directly with drug companies to improve access to some of the costliest single-source brand-name Medicare Part B and Part D drugs.
More Information about Initial Price Applicability Year 2026 Policy and Public Input Opportunities
More Information about Initial Price Applicability Year 2027 Policy
Pharmacy and Dispensing Entity Resources
Selected Drug List for Initial Price Applicability Years (IPAYs) 2026 and 2027
The infographic provides information on each step of the drug selection process for initial price applicability year 2027 using a hypothetical biological product (Drug Hypothetical).
The list of National Drug Codes (NDC) associated with the selected drug list represents the NDCs for which any negotiated maximum fair price would apply consistent with CMS guidance. CMS will continue to update this list based on NDC or drug changes.
CMS announced on March 14, 2025 that agreements have been signed with drug companies manufacturing all 15 drugs covered under Medicare Part D (PDF) that were selected for the second cycle of negotiations in the Medicare Drug Price Negotiation Program (Negotiation Program). The negotiations with participating drug companies will occur in 2025, and any negotiated prices will become effective beginning in 2027. The fact sheet above contains additional information regarding the negotiation process and participating drug manufacturers.
File for Negotiated Prices, also known as Maximum Fair Prices in Statute (ZIP)
This file contains information on the negotiated prices under the Medicare Drug Price Negotiation Program, which the statute refers to as maximum fair prices (MFPs), for 10 drugs covered under Medicare Part D that will go into effect beginning January 1, 2026, based on negotiations and agreements reached between CMS and participating drug companies. The file contains the single negotiated price for a 30-day equivalent supply of each selected drug, NDC-9 per unit price, and NDC-11 per package price. The file also contains other important information regarding updates to the NDCs and MFPs.
The file is updated annually each year subsequent to the first initial price applicability year of the price applicability period for each selected drug, at a minimum, to show the inflation-adjusted negotiated price for the selected drug. Additional updates are made on a recurring basis to account for the application of the negotiated price to new NDC-11s of selected drugs or when an NDC-11 should no longer have the negotiated price applied. Lastly, additional updates are made to account for when a drug is no longer selected. CMS will publish the file in both .xlsx and .csv file formats.
Fact Sheet: Negotiated Prices for Initial Price Applicability Year 2026 (PDF)
The below links contain the MFP explanations for the 10 drugs covered under Medicare Part D that were selected for the first cycle of negotiations; the MFPs will go into effect on January 1, 2026.
- MFP Explanations
The MFP explanations provide information about CMS’ perspective on the data that had the greatest impact on CMS’ determination of offers and consideration of counteroffers consistent with the factors outlined in the IRA. Each MFP explanation includes details that are unique to the negotiation for that particular drug, along with information about the data received, the exchange of offers and counteroffers, and the negotiation meetings. Consistent with the confidentiality policy in CMS’ revised guidance (PDF), the MFP explanations include redactions to protect proprietary information. If you require assistance obtaining or wish to report an issue related to the accessibility of any content included in the MFP explanation files, please email IRARebateandNegotiation@cms.hhs.gov.
Guidance for Second Cycle of Negotiation and Manufacturer Effectuation of the Maximum Fair Price
CMS issued final guidance for the second cycle of negotiations for the Medicare Drug Price Negotiation Program, along with additional information on CMS support for manufacturer effectuation of MFPs in 2026 and 2027.
CMS voluntarily sought comment on the draft guidance for initial price applicability year 2027 and manufacturer effectuation of negotiated MFPs in initial price applicability years 2026 and 2027. The comment period was open for 60 days and closed on July 2, 2024. After considering the public comments received in response to the draft guidance, CMS issued this final guidance for initial price applicability year 2027 and for manufacturer effectuation of the MFP in 2026 and 2027.
- Final Guidance Documents
Medicare Drug Price Negotiation Program Final Guidance (PDF) (October 2, 2024)
Fact Sheet: Medicare Drug Price Negotiation Final Guidance (PDF) (October 2, 2024)
Public Comments: Medicare Drug Price Negotiation Program Draft Guidance (PDF) (submitted no later than July 2, 2024)
Final Maximum Fair Price File Layout and Definitions Document (ZIP) (October 2, 2024)
Information Collection Requests (ICRs)
- Small Biotech Exception and Biosimilar Delay Approved ICR
The Small Biotech Exception and Biosimilar Delay approved ICR is available for viewing on OMB's website. Click "all" to see full details. The submission period for initial price applicability year 2027 closed on December 10, 2024.
- Negotiation Data Elements and Drug Price Negotiation Process Approved ICR
The Negotiation Data Elements and Drug Price Negotiation Process approved ICR is available for viewing on OMB’s website. Click “all” to see full details. For initial price applicability year 2027, data submissions from participating drug companies of the selected drugs must be provided to CMS via the CMS Health Plan Management System (CMS HPMS) by March 1, 2025. Members of the public may also submit evidence about the selected drugs and their alternative treatments by March 1, 2025, via this web link or via the web link available on the CMS HPMS landing page. See below for more information under the “Public Submission of Information about Selected Drugs and Their Therapeutic Alternatives” section on this page. For initial price applicability year 2027, CMS will issue an initial written offer no later than June 1, 2025 and statutory written counteroffers, if applicable, will be due from participating manufacturers of the selected drugs 30 days after receipt of the initial offer.
Public Submission of Information about Selected Drugs and Their Therapeutic Alternatives
Any individual may access the Public Submission Form for Reporting Evidence about Selected Drugs and Their Therapeutic Alternatives for initial price applicability year 2027 in one of two ways:
- Through this direct link: Public Submission Form for Reporting Evidence about Selected Drugs and Their Therapeutic Alternatives; or
- By clicking the link for the “Public Submission Form for Reporting Evidence about Selected Drugs and Their Therapeutic Alternatives” from the submission platform’s landing page (CMS HPMS) located at https://hpms.cms.gov/app/ng/home/.
Information about How to Submit the Public Submission Form is available here (PDF).
- Medicare Transaction Facilitator for 2026 and 2027 Initial ICR
The Medicare Transaction Facilitator for 2026 and 2027 initial ICR can be found in the Federal Register. The full text of the ICR can also be found on CMS’ PRA website. The 60-day comment period closed on December 27, 2024.
Medicare Drug Price Negotiation Agreement
Drug manufacturers and other interested parties may review the Medicare Drug Price Negotiation Program Agreement (PDF) and the Instructions for this Agreement (PDF). The Agreement is executed in the CMS Health Plan Management System (HPMS).
Medicare Transaction Facilitator (MTF) Agreements
The draft Medicare Transaction Facilitator (MTF) agreements outline the responsibilities of each party that will be engaged in the Medicare Transaction Facilitator, a core component of implementing the Medicare Drug Price Negotiation Program. CMS anticipates finalizing these draft agreements based on public feedback as well as input from the MTF contractors involved in the development and operations of the MTF system; we anticipate issuing the final Medicare Transaction Facilitator Agreements in Spring 2025. For more information about these agreements, see the FAQs here (PDF).
- Draft MTF agreements are available for review and feedback here:
CMS is currently developing a Medicare Transaction Facilitator (MTF) to support effectuation of the negotiated maximum fair prices. A timeline for the major milestones for the system development process is available here (PDF).
Contract Year 2026 Medicare Advantage and Part D Proposed Rule (CMS-4208-P)
New provisions for Medicare Drug Price Negotiation Program
The Contract Year (CY) 2026 Medicare Advantage and Part D proposed rule includes a provision that would require that Part D sponsors’ network contracts with pharmacies require such pharmacies to be enrolled in the Medicare Drug Price Negotiation Program’s Medicare Transaction Facilitator Data Module. The rule also proposes to shorten the Prescription Drug Event (PDE) submission timeliness requirement for initial PDE records for selected drugs from 30 calendar days to 7 calendar days to help ensure prompt payments by drug manufacturers to dispensing entities to provide access to the MFP. To review or comment on the CY 2026 MA and Part D proposed rule during its 60-day public comment period, visit the Federal Register. Comments must be submitted no later than January 27, 2025.
Page Last Modified:
03/17/2025 06:49 PM