Medicare Unveils New Rules for Drug Price Negotiations

The updated guidance aims to enhance dialogue with pharmaceutical companies and expand cost-saving measures for beneficiaries.

The Centers for Medicare and Medicaid Services (CMS) will begin selecting the most expensive prescription drugs for negotiation by February 2025, with new prices effective in 2027.
Changes to the negotiation process include earlier meetings with drug manufacturers and increased opportunities for counter offers.
Fifteen drugs, including treatments for diabetes, cancer, asthma, Huntington’s disease, and irritable bowel syndrome, are expected to be part of the second negotiation cycle.
The initiative is projected to save Medicare recipients approximately $1.5 billion in out-of-pocket costs when new prices take effect.
These efforts are part of broader cost-saving measures under the Inflation Reduction Act, which also caps insulin costs and provides free vaccines for Medicare beneficiaries.