In an effort to lower the price of prescription drugs, the Inflation Reduction Act of 2022 established the Medicare Drug Price Negotiation Program to negotiate maximum fair prices (MFPs) for certain high-expenditure single source drugs and biologics. Richard Frank and Gerard Anderson recently commented on draft guidance by the Centers for Medicare and Medicaid Services (CMS) on the Medicare Drug Price Negotiation Program. The draft guidance specifically seeks input regarding the implementation of the Negotiation Program for initial price applicability year 2027 and manufacturer effectuation of the MFP in 2026 and 2027.
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- Acknowledgements and disclosures
- The authors thank Rachel Sachs for careful review of the comment letter. They also thank Amaya Allen and Caitlin Rowley for excellent research and editorial assistance.The Brookings Institution is financed through the support of a diverse array of foundations, corporations, governments, individuals, as well as an endowment. A list of donors can be found in our annual reports published online here. The findings, interpretations, and conclusions in this report are solely those of its author(s) and are not influenced by any donation.
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Table of Contents
- 1. Competitive Entry Standards 1
- Payment and Price Components 2
- Congressional Budget Office A Comparison of Brand-Name Drug Prices Among Selected Federal Programs September 2021 Table 2 provides the comparisons between various Medicare prices and WAC. 3
- Negotiation Factors 4
- See U.S. GAO CMS Should Monitor Effects of Rebates on Plan Formularies and Beneficiary Spending September 2023 GAO-23-105270 4
- Negotiation Process 5
