CMS Proposes Creating Permanent Framework for Medicare Drug Price Negotiations

The Supreme Court declined to consider appeals by pharma companies seeking to challenge the government’s ability to negotiate prescription drug prices.

Medicare and Medicaid Administrator Mehmet Oz speaks during a press briefing in the James S. Brady Press Briefing Room in the White House, in Washington on June 2, 2026. Mandel Ngan/AFP via Getty Images

The U.S. Centers for Medicare and Medicaid Services (CMS) has proposed a permanent framework for its Medicare drug price negotiation program that it said will make the process for lowering costs more transparent.

The agency said in a June 12 statement that the proposed rule also aimed at providing long-term certainty for drugmakers participating in the program.

It stated that the proposed rule would establish policies for negotiating and renegotiating high-cost, single-source drugs, beginning in the 2029 price-applicability year.

“This proposed rule lowers drug prices for seniors and ensures continued savings,” CMS Administrator Dr. Mehmet Oz said in the statement.

“We are moving from annual updates to a permanent, predictable framework. This approach puts patients first, strengthens Medicare, and protects the innovation pipeline that delivers future cures.”

Under the proposed rule, CMS said it would select up to 20 additional eligible drugs covered under Part D or payable under Part B for a fourth cycle of negotiations in 2029, as well as future cycles of the program.

Part D refers to the prescription drug benefit run by private insurers approved by Medicare. Meanwhile, Part B covers doctors’ services, outpatient care, and some preventive services such as flu vaccines and diabetes screenings, as well as oxygen equipment.

CMS said it was required by law to transition the drug negotiation program from agency guidance to regulation, creating a long-term framework.

The proposed rule also seeks to modify the policy used to identify qualifying single-source drugs to address “potential program integrity concerns” involving certain new formulations, the agency said.

“Together, these policies would strengthen program integrity, improve predictability for stakeholders, and ensure compliance with the law while continuing to deliver meaningful savings for beneficiaries,” it said.

CMS also proposed a temporary floor for small biotech drugs that would limit the agency from offering or accepting a counteroffer for a maximum fair price for certain eligible drugs sold by small biotech companies during the initial price applicability years of 2029 and 2030.

Medicare is a federal health insurance program for Americans aged 65 or older, as well as those with certain disabilities.

The Supreme Court in May declined to consider appeals by six pharmaceutical companies seeking to challenge the government’s ability to negotiate prescription drug prices for the Medicare program.

The court’s decision effectively ends the lawsuits brought by AstraZeneca, Bristol Myers Squibb, Janssen, Novartis, Novo Nordisk, and Boehringer Ingelheim.

The drugmakers had based their arguments on the First Amendment, the Fifth Amendment’s takings clause, the Eighth Amendment’s prohibition on excessive fines, and due-process grounds.

Lawrence Wilson contributed to this report.