CMS proposes closing a loophole drugmakers use to delay Medicare price negotiation
The Centers for Medicare and Medicaid Services proposed a rule on June 12 to close a workaround that lets drugmakers postpone Medicare price negotiation. Under current law Medicare can negotiate only 7 to 11 years after a drug’s FDA approval, and manufacturers have been able to extend that window by adding active ingredients to an existing product, effectively restarting the clock.
The mechanism matters because negotiation only bites once a drug becomes eligible: every delay preserves list pricing for longer. CMS says the change “maintains program integrity,” while drugmakers argue it would discourage them from improving existing therapies. Drugs selected under the rule would be announced by February 1, 2027, with negotiated prices taking effect in 2029 — so the fiscal impact, like the policy fight, plays out over years rather than months. The administration weighed a similar move last year before delaying for further analysis.