§1320f Establishment of Program

Summary

The Secretary must set up a Drug Price Negotiation Program. For each price period the Secretary will publish a list of selected drugs, make agreements with the drug makers, negotiate or renegotiate a maximum fair price for each selected drug, and handle the required publications, administration, and compliance checks. Key terms and special 2026 rules: Initial price applicability year — a year, beginning with 2026. Price applicability period — the span from the first year a drug is selected through the last year it is selected. Selected drug publication date — normally February 1 two years before the initial year for that drug. Negotiation period — starts on the earlier of when the manufacturer signs an agreement or February 28 after the selected drug publication date, and ends on November 1 of the year that begins two years before the initial year. Manufacturer — as defined elsewhere in the law. Maximum fair price eligible individual — someone covered under Medicare Part D (or MA–PD) for a drug dispensed at a pharmacy or under Medicare Part B (including MA Part C enrollees) when Part B could pay. Maximum fair price — the negotiated price for a drug for a given year, adjusted as the law requires. Reference product — as defined in section 262(i). Total expenditures — for Part D includes total gross covered prescription drug costs; for Part B excludes drugs bundled into other payments. Unit — the smallest identifiable amount of a drug (for example, a tablet or a milligram). For initial price applicability year 2026 only, several dates are moved earlier: selected-drug publication is September 1, 2023; some negotiation and agreement dates include October 1, 2023 and October 2, 2023; other deadlines include February 1, 2024, August 1, 2024, and September 1, 2024; certain program data use the period June 1, 2022 through May 31, 2023.