CMS filed a proposed rule Friday to codify the Medicare drug price negotiation program, targeting up to 20 additional drugs for a fourth negotiation cycle beginning with initial price applicability year 2029.
The program has already completed two rounds: 25 high-expenditure drugs have gone through negotiation, and the first batch of resulting price cuts took effect at the start of this year. Until now, CMS has run the program on guidance it can revise without notice-and-comment rulemaking. The proposed rule changes that.
CMS Administrator Mehmet Oz framed the shift as moving from “annual updates to a permanent, predictable framework.” The rule would also codify two Part D policies: formulary inclusion requirements for selected drugs and the definition of “negotiated price.”
The rule includes a Temporary Floor for Small Biotech Drugs, required by the Inflation Reduction Act, that limits how aggressively CMS can push on maximum fair prices for qualifying products during IPAY 2029 and 2030.
The real shift here is legal durability. Pharma has spent years likening the IRA negotiation process to government price controls and lobbying hard against it — and gotten nowhere. Codifying the program in regulation raises the bar for any future administration to reverse course: they’d need to go through notice-and-comment rulemaking to undo what CMS is locking in today. That won’t stop a determined administration, but it makes the unwind slower, more expensive, and more politically visible. The fourth cycle covers drugs under both Part D and Part B.
Cycle four starts with IPAY 2029.