WASHINGTON, Oct 2 (Reuters) - The U.S. government has announced an extension for negotiations and additional opportunities for drug manufacturers to submit counter offers during the second round of talks regarding price reductions for its Medicare program. This decision was revealed on Wednesday.
The Centers for Medicare and Medicaid Services (CMS), which administers Medicare for millions of Americans aged 65 and older, is set to select the costliest prescription medications for negotiation by February 1, with the new prices expected to take effect in 2027.
This process is being closely monitored by pharmaceutical companies that produce the 15 drugs likely to be chosen for negotiations. The CMS has indicated that changes to the negotiation process were made in response to feedback from patients and drugmakers. These changes include earlier meetings with companies and increased opportunities for counter offers.
CMS will now engage with drugmakers before issuing its initial offer and will hold one of the three scheduled negotiation meetings prior to the deadline for the first counter offer. If a company opts to counter the government's offer, they will have two additional meetings to negotiate.
A CMS official stated, 'What we plan to do is have meetings with manufacturers before CMS actually sends an initial offer. But then once we have done an initial offer, we will have a first optional negotiation meeting with the manufacturer earlier than we did this past year.' This approach aims to foster dialogue regarding the initial offer and provide manufacturers with the opportunity to present their counteroffers.
In August, CMS announced prices for ten drugs in its first round of cuts following a year of negotiations. These prices are set to take effect in January 2026 and are projected to save older Americans approximately $1.5 billion in out-of-pocket costs, according to the agency.
Next year's negotiations will occur within a shorter timeframe, with a final decision on prices expected by November 30, 2025.