July goal set for final US Medicare drug negotiation guidance

By Ahmed Aboulenein

WASHINGTON (Reuters) – The U.S. government aims to publish the final guidance for its Medicare drug price negotiation program in early July and is currently talking to companies about its contents, a top health official said on Wednesday.

The guidance will finalize the details of how President Joe Biden’s signature drug pricing reform will be carried out. The U.S. Centers for Medicare and Medicaid (CMS) released a draft in March and gave a 30-day window for public comments. It is unclear how much will change in the final guidance.

The agency is accepting feedback until Friday and has already been talking to drugmakers and other stakeholders over the past few months, CMS Administrator Chiquita Brooks-LaSure said in an interview.

CMS will select in September Medicare’s 10 costliest prescription medicines, based on gross spending, for negotiating price cuts that will go into effect in 2026.

Companies are trying to get more details around how CMS will measure what and how big the benefits of their drugs are, she said, as well as the kind of data they will have to provide.

Other industry concerns, Brooks-LaSure said, include how the negotiation process will affect drugs in the same class as those that are selected for negotiation.

“Let’s say one of the 10 we choose is for hypertension,” she said. “How will that affect the other drugs in that same class that we won’t be negotiating directly on? What will be some of those implications?”

The program was established under the Inflation Reduction Act, signed into law last year. It will for the first time allow Medicare, the government health insurance program for Americans age 65 and older, to negotiate prices on prescription drugs.

In drafting the guidance, Brooks-LaSure said the agency was deliberately focused on closing potential loopholes companies could use to get around being selected for negotiations.

The draft guidance showed the agency would include spending on all formulations or dosage forms of a drug, even if it received a separate U.S. Food and Drug Administration (FDA) approval for a different use.

“We are very focused on making sure that at the end of the day, this negotiation process is effective, and that means that it delivers lower costs for the people who are on the program, Medicare beneficiaries, as well as for the program as a whole.”

(Reporting by Ahmed Aboulenein; Editing by Michael Erman and Sonali Paul)