CMS released a proposed rule on June 12, 2026 to make the Medicare Drug Price Negotiation Program permanent. The program has operated through annual guidance since launch. The new proposal moves negotiation into codified regulation, starting with initial price applicability year 2029. For Part D and Part B leaders, pharmacy teams, and product strategists, the shift from yearly guidance to a durable framework changes how you plan for the next several cycles.
What changed
CMS will select up to 20 additional negotiation-eligible drugs covered under Part D or payable under Part B for the fourth cycle and each cycle after. The proposal codifies the program in regulation rather than guidance, giving plans, pharmacies, and manufacturers clearer rules of the road.
Two Part D provisions stand out. Plans must include selected drugs with a maximum fair price in effect on their formularies. Negotiated prices paid to dispensing entities must stay at or below the maximum fair price plus any dispensing fees.
The rule also adds a Temporary Floor for Small Biotech Drugs, limiting counteroffers below a set floor during 2029 and 2030, and narrows the policy used to identify qualifying single-source drugs to address program integrity concerns from certain new formulations.
Where the program stands
CMS has negotiated prices for 25 high-expenditure drugs across the first two years. Maximum fair prices for the first 10 selected drugs took effect January 1, 2026, lowering out-of-pocket costs for many beneficiaries. CMS also built the Medicare Transaction Facilitator to support manufacturer effectuation of the price.
Why this matters for health plans
Formulary design, bid strategy, and pharmacy operations all run on predictability. A permanent framework gives your team a stable basis for multi-year planning rather than annual reaction to fresh guidance. Product leaders should model how 20 additional selected drugs per cycle reshape formulary placement and rebate dynamics. Pharmacy teams should prepare dispensing and reconciliation workflows for an expanding set of drugs carrying a maximum fair price.
What to consider next
How will a permanent negotiation framework reshape your formulary and bid strategy through 2029? Which operational gaps surface as the selected-drug list grows each cycle?
Pharmacy, product, and Part D leaders weighing these moves will find them at an upcoming RISE event.