§1320f — Title 42 The Public Health and Welfare | U.S. Code

§1320f Establishment of program

Title 42 › Chapter CHAPTER 7— - SOCIAL SECURITY › Subchapter SUBCHAPTER XI— - GENERAL PROVISIONS, PEER REVIEW, AND ADMINISTRATIVE SIMPLIFICATION › Part Part E— - Price Negotiation Program To Lower Prices for Certain High-Priced Single Source Drugs › § 1320f

Last updated Apr 6, 2026|Official source

Summary

The Secretary must set up a Drug Price Negotiation Program. Each price period the Secretary must post a list of chosen drugs, make agreements with the drugs’ manufacturers, set or update a top “maximum fair price” for each chosen drug, and handle publication, admin work, and checks to make sure rules are followed. The law also defines key words. “Initial price applicability year” means a year starting with 2026. “Price applicability period” is the span from the first year a qualifying single‑source drug is chosen until the last year it is chosen. “Selected drug publication date” is February 1 two years before the initial year. “Negotiation period” starts on the earlier of the date the manufacturer signs an agreement or February 28 after the publication date, and ends on November 1 two years before the initial year. Special 2026 dates replace those defaults: use September 1, 2023 for the publication date; October 1, 2023 or other listed dates for negotiations and agreements; and the drug data period to pick drugs is June 1, 2022 through May 31, 2023. “Manufacturer,” “reference product,” and the exact meanings of “total expenditures” and “unit” are defined elsewhere in the law and used as described.

Title 42, §1320f

The Public Health and Welfare — Source: USLM XML via OLRC

(a)The Secretary shall establish a Drug Price Negotiation Program (in this part referred to as the “program”). Under the program, with respect to each price applicability period, the Secretary shall—

(1)publish a list of selected drugs in accordance with section 1320f–1 of this title;

(2)enter into agreements with manufacturers of selected drugs with respect to such period, in accordance with section 1320f–2 of this title;

(3)negotiate and, if applicable, renegotiate maximum fair prices for such selected drugs, in accordance with section 1320f–3 of this title; 11 So in original. Probably should be followed by “and”.

(4)carry out the publication and administrative duties and compliance monitoring in accordance with section 1320f–4 and 1320f–5 of this title.

(b)For purposes of this part:

(1)The term “initial price applicability year” means a year (beginning with 2026).

(2)The term “price applicability period” means, with respect to a qualifying single source drug, the period beginning with the first initial price applicability year with respect to which such drug is a selected drug and ending with the last year during which the drug is a selected drug.

(3)The term “selected drug publication date” means, with respect to each initial price applicability year, February 1 of the year that begins 2 years prior to such year.

(4)The term “negotiation period” means, with respect to an initial price applicability year with respect to a selected drug, the period—

(A)beginning on the sooner of—

(i)the date on which the manufacturer of the drug and the Secretary enter into an agreement under section 1320f–2 of this title with respect to such drug; or

(ii)February 28 following the selected drug publication date with respect to such selected drug; and

(B)ending on November 1 of the year that begins 2 years prior to the initial price applicability year.

(c)For purposes of this part:

(1)The term “manufacturer” has the meaning given that term in section 1395w–3a(c)(6)(A) of this title.

(2)The term “maximum fair price eligible individual” means, with respect to a selected drug—

(A)in the case such drug is dispensed to the individual at a pharmacy, by a mail order service, or by another dispenser, an individual who is enrolled in a prescription drug plan under part D of subchapter XVIII or an MA–PD plan under part C of such subchapter if coverage is provided under such plan for such selected drug; and

(B)in the case such drug is furnished or administered to the individual by a hospital, physician, or other provider of services or supplier, an individual who is enrolled under part B of subchapter XVIII, including an individual who is enrolled in an MA plan under part C of such subchapter, if payment may be made under part B for such selected drug.

(3)The term “maximum fair price” means, with respect to a year during a price applicability period and with respect to a selected drug (as defined in section 1320f–1(c) of this title) with respect to such period, the price negotiated pursuant to section 1320f–3 of this title, and updated pursuant to section 1320f–4(b) of this title, as applicable, for such drug and year.

(4)The term “reference product” has the meaning given such term in section 262(i) of this title.

(5)The term “total expenditures” includes, in the case of expenditures with respect to part D of subchapter XVIII, the total gross covered prescription drug costs (as defined in section 1395w–115(b)(3) of this title). The term “total expenditures” excludes, in the case of expenditures with respect to part B of such subchapter, expenditures for a drug or biological product that are bundled or packaged into the payment for another service.

(6)The term “unit” means, with respect to a drug or biological product, the lowest identifiable amount (such as a capsule or tablet, milligram of molecules, or grams) of the drug or biological product that is dispensed or furnished.

(d)Notwithstanding the provisions of this part, in the case of initial price applicability year 2026, the following rules shall apply for purposes of implementing the program:

(1)Subsection (b)(3) shall be applied by substituting “September 1, 2023” for “, with respect to each initial price applicability year, February 1 of the year that begins 2 years prior to such year”.

(2)Subsection (b)(4) shall be applied—

(A)in subparagraph (A)(ii), by substituting “October 1, 2023” for “February 28 following the selected drug publication date with respect to such selected drug”; and

(B)in subparagraph (B), by substituting “August 1, 2024” for “November 1 of the year that begins 2 years prior to the initial price applicability year”.

(3)section 1320f–1 of this title shall be applied—

(A)in subsection (b)(1)(A), by substituting “during the period beginning on June 1, 2022, and ending on May 31, 2023” for “during the most recent period of 12 months prior to the selected drug publication date (but ending not later than October 31 of the year prior to the year of such drug publication date), with respect to such year, for which data are available”; and

(B)in subsection (d)(1)(A), by substituting “during the period beginning on June 1, 2022, and ending on May 31, 2023” for “during the most recent period for which data are available of at least 12 months prior to the selected drug publication date (but ending no later than October 31 of the year prior to the year of such drug publication date), with respect to such year”.22 So in original. Probably should read as follows: “during the most recent 12-month period for which data are available prior to such selected drug publication date (but ending no later than October 31 of the year prior to the year of such drug publication date)”.

(4)section 1320f–2(a) of this title shall be applied by substituting “October 1, 2023” for “February 28 following the selected drug publication date with respect to such selected drug”.

(5)section 1320f–3(b)(2) of this title shall be applied—

(A)in subparagraph (A), by substituting “October 2, 2023” for “March 1 of the year of the selected drug publication date, with respect to the selected drug”;

(B)in subparagraph (B), by substituting “February 1, 2024” for “the June 1 following the selected drug publication date”; and

(C)in subparagraph (E), by substituting “August 1, 2024” for “the first day of November following the selected drug publication date, with respect to the initial price applicability year”.

(6)section 1320f–4(a)(1) of this title shall be applied by substituting “September 1, 2024” for “November 30 of the year that is 2 years prior to such initial price applicability year”.

Notes & Related Subsidiaries

Statutory Notes and Related Subsidiaries

Implementation for 2026 Through 2028 Pub. L. 117–169, title I, § 11001(c), Aug. 16, 2022, 136 Stat. 1854, provided that: “The Secretary of Health and Human Services shall implement this section [enacting this part and amending section 1395w–3a, 1395w–22, 1395w–27, 1395w–102, 1395w–104, 1395w–111, 1395w–112, 1395w–115, 1395w–153, and 1396r–8 of this title], including the

Amendments

made by this section, for 2026, 2027, and 2028 by program instruction or other forms of program guidance.”