Trump Outlines Plan for Third Round of Medicare Drug Price Talks

The Trump administration issued a final plan Tuesday for how it will carry out the third round of the Medicare drug price negotiations, pushing forward a Biden-era program despite ongoing opposition from the pharmaceutical industry.

The 381-page final guidance by the Centers for Medicare & Medicaid Services outlines how the US government plans to set the prices of up to additional 15 drugs in the program. The negotiations for the third cycle are slated to begin in 2026 and prices will go into effect in 2028.

“CMS is working to lower healthcare and prescription drug costs for Americans while ensuring the negotiation process is open, fair, and responsive to changes in the market and patient needs,” Mehmet Oz, administrator for the CMS, said in a statement.

“We’ve listened to stakeholders, and their feedback helped us make the Negotiation Program more transparent, more workable for manufacturers, and more responsive to the needs of Medicare beneficiaries,” he said.

The program was created under former President Joe Biden’s signature Inflation Reduction Act and allows the US government to be in back-and-forth talks with manufacturers over drug prices covered under Medicare.

The pharmaceutical industry criticized the Trump administration’s draft guidance earlier this year, claiming it doubled down on Biden’s implementation plans.

The final guidance included several changes and provisions, such as the expansion of the program’s “Orphan Drug Exclusion” provision following the passage of President Donald Trump’s tax-and-spending law earlier this year.

The program previously limited an exemption to drugs that treat only one rare disease from negotiations. But the tax law, passed in July, exempts drugs with multiple rare disease indications from the program.

The final guidance also left out a proposal to consider fixed combination drugs for the program, but the agency shared its intent to address it in the future.

That proposal faced heavy pushback from the drug industry, spurring concerns about the government’s legal authority and statutory basis to implement it.

The final guidance also clarified that, for vaccines for infectious diseases, it will identify a potential qualifying single source drug as all dosage forms and strengths of the vaccine with the same antigen components and the same holder of the biologic application.

“Today’s guidance will provide Americans with greater access to affordable, life-saving medications while promoting continued investment in new drugs,” Health and Human Services Secretary Robert F. Kennedy, Jr. said in a statement.