Medicare Drug Price Negotiations Face Challenges Ahead

The Centers for Medicare and Medicaid Services (CMS) has announced negotiated prices for 15 drugs as part of the Medicare Drug Price Negotiation Program. This initiative marks the second phase of negotiations, with the first set of prices set to take effect in January 2026. Despite the extensive groundwork laid over recent months, stakeholders are expressing concerns regarding the program’s implementation and its potential impact on pharmacies and patient access.

Working on the Senate Finance Committee has provided a unique perspective on the complexities involved in this negotiation program. The scale of the initiative is significant; CMS predicts savings of nearly $6 billion on the first ten drugs and $12 billion for the total of fifteen drugs negotiated in 2025. Yet, the intricacies of the program’s reach have become apparent through discussions with patients and healthcare providers, highlighting fears about a new payment model that includes manufacturer-issued refunds alongside standard health plan reimbursements.

Pharmacies are particularly anxious about these refunds, worrying they could be insufficient or delayed. This uncertainty may lead to pharmacies choosing not to stock or dispense the negotiated drugs. Organizations such as the National Community Pharmacists Association and the American Society of Consultant Pharmacists have voiced concerns that the new program could result in reimbursement delays, potential pharmacy closures, and reductions in staff. In response to these fears, a bipartisan coalition of 26 lawmakers has urged the Department of Health and Human Services to take action, with Rep. Beth Van Duyne introducing a bill aimed at compensating pharmacies for lost revenue.

CMS has initiated several steps to alleviate these concerns. The agency has provided guidance on calculating the required manufacturer refunds and established a system for pharmacies to report cash-flow issues. Moreover, CMS has communicated to health plans the necessity of continuing coverage for the negotiated drugs. Despite these measures, doubts linger about their effectiveness.

While economists and policy analysts will scrutinize Medicare spending data for indications of savings, a robust monitoring framework is essential to identify and address disruptions early. The focus must not only remain on manufacturer compliance, which is mandated by law, but also extend to ensuring insurer compliance. Although Part D plans are legally required to cover negotiated drugs, CMS’s guidance indicates they will only monitor the formulary status without addressing how these drugs are managed within the plans. This oversight could create challenges, as insurers may be incentivized to limit the dispensing of negotiated medications to protect their rebate income.

Monitoring of Part D claims and dispensing records on a quarterly basis is critical. If claims for negotiated drugs are denied, patients may face significant barriers in accessing necessary treatments, potentially leading them to more expensive or less effective alternatives. Without timely oversight, the promised savings for Medicare may not materialize, and patients could suffer adverse health effects.

As community pharmacy closures continue to rise, CMS must act swiftly to alert manufacturers and pharmacy benefit managers to prevent delays in reimbursements. Tracking the rate of pharmacy closures will not only be resource-intensive but could also provide valuable insights ahead of the anticipated inclusion of community oncology clinics in the program in 2028.

While CMS is currently engaging with pharmacy stakeholders, a collaboration focused on ongoing financial health monitoring may yield beneficial outcomes. As the agency prepares to launch this expansive initiative with numerous stakeholders and competing interests, it is vital to establish protocols that will ensure timely payments and monitor drug dispensing patterns effectively.

Should technological barriers hinder data collection or tracking, the impact on patient care could be severe, and taxpayers may not see the anticipated savings. Congress has a role to play in supporting CMS Administrator Mehmet Oz to facilitate the rollout and address any legislative constraints that may arise. With patients growing increasingly frustrated with healthcare costs and stakeholders navigating complex regulatory landscapes, the success of the Medicare Drug Price Negotiation Program will be closely observed in the coming months.