Medicare drug price negotiation: CMS sets permanent rules
November 9, 2026
A final rule from CMS sets permanent policies for Medicare drug price negotiation, beginning with prices effective in 2029. The agency says the rule gives manufacturers greater predictability and supports continued innovation. By February 1, 2027, CMS will select up to 20 additional negotiation-eligible drugs for the fourth cycle of negotiations, along with drugs for renegotiation where appropriate. The rule is Federal Register document 2026-22792.
Medicare drug price negotiation: three policy changes
The first change covers certain fixed-combination drugs that CMS determines are new formulations of existing drugs. CMS believes the policy avoids creating an incentive for the primary manufacturer to shift patients toward the new formulation and circumvent the application of the maximum fair price (MFP) for those patients. The second implements the Temporary Floor for Small Biotech Drugs, which bars CMS from offering or accepting a counteroffer below a specified floor for eligible drugs in initial price applicability years 2029 and 2030.
The third codifies two Part D policies, consistent with statutory requirements. Plans must include selected drugs with an MFP in effect on their formularies. Plans must also limit the negotiated prices they pay dispensing entities to the MFP plus any dispensing fees.
CMS Administrator Dr. Mehmet Oz said: “This rule provides additional tools to help CMS negotiate better deals, achieve greater savings for taxpayers and beneficiaries, and improve health outcomes for seniors who rely on the Medicare Prescription Drug Program.”
Why it matters
For readers following the Medicare Drug Price Negotiation Program, the rule sets the terms before the next selection, due by February 1, 2027. The release gives no value for the small biotech floor, so readers cannot yet set it against the MFP figures.
The fixed-combination provision targets manufacturer behavior rather than price levels, which makes it the part of the rule most worth checking against the rule text. For plan sponsors, the two Part D provisions make formulary inclusion and dispensing payments fixed requirements tied to the MFP.
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