Trump admin targets Medicare drug negotiation loophole
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- The Trump administration proposed on Friday a policy change targeting a loophole that lets drugmakers avoid Medicare price negotiation by adding active ingredients to existing drugs.
- The proposed rule is part of CMS's annual process for selecting the next 20 drugs and biologics for price negotiation, with the selected drugs to be announced by Feb. 1, 2027 and negotiated prices taking effect in 2029.
- The administration considered a similar anti-circumvention policy last year but deferred a decision to study the issue further before reviving it now.
- Medicare must wait 7 to 11 years after FDA approval before negotiating a drug's price, with the wait time depending on the type of medicine — biologics typically administered in doctors' offices receive a longer delay than oral drugs.
Why it matters: Drugmakers have used formulation tweaks like adding active ingredients to delay eligibility for negotiation, and this proposed rule folds anti-circumvention language directly into CMS's annual selection process for the next 20 drugs due Feb. 1, 2027. That timing tightens the pipeline ahead of 2029 price-effective dates, and the 7-11 year post-approval wait — longer for biologics than oral drugs — is the structural asymmetry the new language aims to close.
