CMS finalizes Medicare drug price negotiation rule for prices effective in 2029

The Centers for Medicare & Medicaid Services (CMS) issued a final rule that codifies the Medicare Drug Price Negotiation Program for initial price applicability year 2029 and beyond, the CMS fact sheet says. The rule, CMS-4215-F, is effective Dec. 5, 2026. CMS said that by Feb. 1, 2027 it will select up to 20 additional negotiation-eligible drugs under Part D and/or Part B, plus drugs for renegotiation as appropriate, for the fourth cycle of negotiations.

1. 1 Engagement Engagement with primary manufacturers and interested parties, including patients.
2. 2 Written initial offer CMS delivers a written initial offer with a concise justification.
3. 3 Accept or counteroffer The primary manufacturer can accept the offer or provide a statutory written counteroffer.
4. 4 Optional meetings The process includes optional negotiation meetings and additional price exchange opportunities.
5. 5 Final offer A final offer from CMS where applicable.
6. 6 Publication CMS publishes the agreed-upon MFPs with explanations.

From the CMS fact sheet on final rule CMS-4215-F, Nov. 5, 2026.

Why it matters

For initial price applicability years 2026 through 2028, the fact sheet says, statute directed CMS to implement the program through program instruction and other forms of program guidance. CMS said that authority is expiring, so the policies now move into regulation. The CMS press release describes the rule as a permanent framework for negotiating prices of high-cost drugs and says it gives participating manufacturers greater predictability.

What the final rule sets, as of Nov. 5, 2026

CMS issued the rule on Nov. 5, 2026. The fact sheet and the press release list these policies:

• Selection: CMS will select up to 20 drugs covered under Part D and/or payable under Part B for initial price applicability year 2029 and for each later year. It may also select drugs for renegotiation if they meet certain eligibility and selection criteria.
• Manufacturer agreement: a willing primary manufacturer signs the Negotiation Program Agreement no later than Feb. 28 following the selected drug publication date. The agreement stays in effect until the drug is no longer a selected drug, which happens when a generic drug is approved or a biosimilar is licensed and is subject to Bona Fide Marketing, unless the primary manufacturer ends it sooner under specified conditions.
• Fixed combination drugs: CMS finalized its proposed policy for specific fixed combination drugs that CMS determines are new formulations of existing drugs. A product containing active ingredient X plus hyaluronidase is identified as part of the same potential qualifying single source drug as a product from the same BLA holder that contains only active ingredient X, if the hyaluronidase creates a new formulation and enables a new route of administration. CMS said this addresses a program integrity risk, in which a manufacturer could avoid selection or avoid the maximum fair price (MFP) by marketing a new formulation.
• Renegotiation: for 2029 and beyond, CMS finalized its policy to consider the agreed-upon MFP for a drug selected for renegotiation as part of the manufacturer-specific factors it weighs.
• Small biotech drugs: the Temporary Floor for Small Biotech Drugs newly applies for initial price applicability years 2029 and 2030. CMS said it also finalized a modification to the treatment of non-FAMP in the adjusted ceiling calculation for certain qualifying Small Biotech Drugs.
• Part D: plans must include selected drugs with an MFP in effect on their formularies. The negotiated price a plan pays for a selected drug is no greater than the MFP plus any dispensing fees.

Process the rule codifies

The fact sheet says the negotiation process includes engagement with primary manufacturers and interested parties, including patients. CMS delivers a written initial offer with a concise justification. The primary manufacturer can accept the offer or provide a statutory written counteroffer. The process includes optional negotiation meetings, additional price exchange opportunities, and a final offer from CMS where applicable. CMS then publishes the agreed-upon MFPs with explanations.

The primary manufacturer of each selected drug submits information on the non-Federal Average Manufacturer Price (non-FAMP) and other information CMS requires. Primary manufacturers and any interested party may also submit evidence about the selected drugs and potential therapeutic alternatives. CMS said it considers evidence from comparative effectiveness studies.

The fact sheet also says CMS clarified how it treats withdrawn approvals for indications when it checks whether a drug that formerly qualified for the orphan drug exclusion is a qualifying single source drug, in line with the "Working Families Tax Cut" legislation (Pub. L. 119-21).

What remains uncertain

The fact sheet says CMS intends to release final guidance in fall 2026 on manufacturer effectuation of the MFP in 2028, including for drugs payable under Part B (CMS fact sheet). CMS intends to codify MFP effectuation policies for 2029 and future years through Negotiation Program rulemaking in calendar year 2027.

Sources

• CMS: Medicare Drug Price Negotiation Program and Medicare Prescription Drug Benefit Program Final Rule (CMS-4215-F), fact sheet (Nov 05, 2026)
• CMS: CMS Final Rule Strengthens Supports Lasting Drug Savings, press release (Nov 05, 2026)