Jordan Johnson: Plan for Next Medicare Drug Price Negotiation Finalized

Jordan Johnson posted the following on LinkedIn:

“Round 2 Plan for Next Medicare Drug Price Negotiation – Finalized.

The Biden administration released final guidance for the second cycle of the Medicare Drug Price Negotiation Program, established under the Inflation Reduction Act of 2022. The program enables the government to negotiate prices for high-cost, widely used Medicare-covered drugs. The Centers for Medicare & Medicaid Services (CMS) outlined its approach for implementing these negotiated prices for 2026 and 2027.

The first cycle saw prices negotiated for 10 Part D drugs, set to take effect in January 2026, with CMS predicting significant savings for the government and beneficiaries, although the full impact on the industry is uncertain. For the second round, CMS will negotiate prices for 15 additional drugs, with the list announced by February 2025. These prices will be implemented in 2027.

CMS also clarified its process for ensuring that negotiated prices, referred to as maximum fair prices (MFP), reach eligible individuals through collaboration with the Medicare Transaction Facilitator (MTF). The MTF will facilitate data exchanges and payment tracking between drugmakers and dispensing entities.

In response to stakeholder feedback, CMS revised the timing of negotiation meetings, added patient roundtable events, and introduced more opportunities for price exchanges between CMS and drug companies. Manufacturers must meet specific payment and reporting requirements to avoid penalties, ensuring that negotiated prices are available promptly and accurately.”

Source: Jordan Johnson/LinkedIn

Jordan Johnson is the Founding Partner of Bridge Oncology and serves on the Board of Directors for the National Association of Medication Access and Patient Advocacy. He is also the Founder of The Healthcare Hub and LegacybyImpact.