CMS Finalizes Rules for IRA Drug Price Negotiation
The new regulations overhaul how Medicare pays for prescription drugs beginning 2029.
On Nov. 5, 2026, CMS issued a final rule codifying the Inflation Reduction Act’s Drug Price Negotiation Program (DPNP), the first statutory framework that allows Medicare to negotiate prices for certain high‑cost drugs. The rule sets eligibility criteria, establishes negotiation timelines, and defines price‑reduction caps and enforcement mechanisms. It also requires manufacturers to provide cost‑effectiveness data and establishes a dedicated CMS Office of Drug Pricing Studies to monitor outcomes. The program will begin negotiating starting in 2029, impacting all drugs listed above the threshold. This change introduces a new compliance dimension for pharma clients and could materially shift market pricing strategies. Firms should review the eligibility test, negotiate timelines, and adjust pricing models and contracts accordingly. Surveillance of the program’s implementation will be critical, as CMS may refine the rule based on market feedback.