Reimagining Medicare Drug Price Negotiations
The Inflation Reduction Act and Direct Negotiations
In a historic move, the federal government will directly negotiate drug prices with pharmaceutical companies for certain high-cost drugs covered under Medicare Part D and Part B. This groundbreaking provision, established under the Inflation Reduction Act, marks the first time the government will engage in direct negotiations for drug prices. Medicare Part D covers retail prescription drugs, while Part B includes physician-administered medications.
The Timeline and Implementation
The Centers for Medicare and Medicaid Services (CMS) is implementing the drug price negotiation program according to the timeline set forth in the law. Although the pharmaceutical industry and other entities have filed lawsuits to block the effort, CMS is moving forward. This week, CMS faces a crucial deadline to submit proposed prices to manufacturers for specific drugs.
Key Elements of the Drug Negotiation Process
To understand the drug negotiation process and its implications, consider these three essential charts:
![](https://www.kff.org/wp-content/uploads/2024/01/240131_10-Medicare-Part-D-Drugs-for-Negotiation-2026_Social.png?w=1024)
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