Medicare’s Drug Price Negotiations Get Another Dense Federal Rule
Published Date: 11/9/2026
Rule
Summary
Starting in 2029, Medicare will negotiate drug prices to help lower costs for people using Medicare Part D. This new rule, effective December 5, 2026, sets clear policies to make prescription drugs more affordable and fair. If you or a loved one uses Medicare for prescriptions, expect some savings and changes in how drug prices are set.
Analyzed Economic Effects
9 provisions identified: 3 benefits, 0 costs, 6 mixed.
Rule goes into effect December 5, 2026
The rule is effective December 5, 2026. The Negotiation Program rules in this final rule apply beginning with initial price applicability year 2029, and Part D Program coverage changes begin January 1, 2029.
Medicare will negotiate drug prices starting 2029
Starting with initial price applicability year 2029, Medicare will negotiate maximum fair prices (MFPs) for selected high-expenditure, single-source drugs. The Secretary will select up to 20 drugs covered under Part D or payable under Part B (or both) for initial price applicability year 2029 and subsequent years.
Negotiated prices already applied for selected drugs in prior years
The Secretary previously selected 10 drugs for negotiation with MFPs that took effect in initial price applicability year 2026, selected 15 drugs for initial price applicability year 2027, and selected 15 drugs for initial price applicability year 2028. One drug was selected for renegotiation for initial price applicability year 2028.
Federal spending effects through 2031
CMS states the effects of the Inflation Reduction Act and these policies are to reduce government expenditures for Medicare Part B, to increase Part D expenditures through 2030, and to decrease Part D expenditures beginning in 2031.
Temporary Floor for Small Biotech Drugs (2029–2030)
CMS finalizes how it will implement a Temporary Floor for Small Biotech Drugs on the maximum fair price for initial price applicability years 2029 and 2030, including a modified approach when certain ceiling amounts are below that Temporary Floor.
How one-time Part B drugs get a 30‑day equivalent
CMS finalized policies explaining how it will calculate a 30-day equivalent supply for selected drugs or therapeutic alternatives payable under Medicare Part B that are typically administered one time (for example, some vaccines, gene therapies, and cancer therapies).
Policy for specific fixed combination drug formulations
CMS finalized a policy for certain fixed combination drugs that it determines are new formulations: when products with the same NDA/BLA holder differ because an included active moiety/ingredient/antigen creates a new formulation and enables an alternative route of administration, CMS will identify the potential qualifying single source drug using all dosage forms and strengths of the shared active moiety(s)/ingredient(s)/antigen component(s) offered by that same NDA/BLA holder.
When former orphan drugs become eligible
CMS finalized a clarification of how it will identify the day from which to measure the 7‑ and 11‑year approval/licensure periods for drugs that formerly qualified for the Orphan Drug Exclusion, affecting when such drugs are considered for negotiation eligibility.
CMS review of ‘Bona Fide Marketing’ for generics/biosimilars
CMS finalized the process and schedule by which it will review information to determine whether the manufacturer of an approved generic drug or licensed biosimilar is engaged in ‘‘Bona Fide Marketing’’ of that product, as defined in the rule.
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