CMS Expands Medicare Drug Price Talks To Part B Meds In 2026 Shake Up

The U.S. Centers for Medicare & Medicaid Services (CMS) on Monday issued a draft guidance for public comment on the third cycle of negotiations under the Medicare Drug Price Negotiation Program (Negotiation Program) to lower prescription drug prices.

The draft guidance introduces new policies that would, for the first time, include drugs covered under Medicare Part B in the Medicare Drug Price Negotiation Program.

The guidance also explains how CMS plans to renegotiate prices for some drugs already negotiated for 2026 or 2027.

It clarifies how drugmakers must make the negotiated prices available in those years and extends similar rules for Part D drugs through 2028.

The first round of negotiations, covering 10 Part D drugs, ended in August 2024. A second round, involving 15 more Part D drugs, is currently underway.

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By Feb. 1, 2026, CMS will announce up to 15 additional drugs, covered under either Part D or Part B, for possible negotiation in the third round. Negotiations for this third group will happen in 2026, with new prices taking effect Jan. 1, 2028.

On the same date, CMS will publish the list of drugs selected for initial price negotiations for 2028 and announce any drugs picked for a first round of renegotiation. Those updated prices will also start on January 1, 2028.

CMS invites the public to comment on this draft guidance, including the drug selection process, how negotiated prices are implemented, and ways to improve the program.

The public comment period is open for 45 days. Comments must be submitted by June 26.

Goldman Sachs analyst Asad Haider says investors are concerned about fixed-combination drugs. The draft points out cases where one ingredient affects how the drug is absorbed but doesn’t treat the disease itself. This has led to worries that some subcutaneous (SC) versions of drugs that IV originally gave might be included in Medicare price negotiations under the Inflation Reduction Act (IRA) earlier than expected.

The prior CMS guidance issued under the Biden Administration suggested that sub-q formulations of IV drugs could be excluded from IRA price negotiations.

Stocks of companies with key SC drugs in focus, Johnson & Johnson’s JNJ Darzalex Faspro, Bristol-Myers Squibb & Co’s BMY Opdivo Qvantig, and Merck & Co Inc’s MRK subcutaneous pembrolizumab/Keytruda (in development), are trading lower.

“At a higher level, we view this development as another aspect of policy uncertainty that continues to persist, in addition to the Most Favored Nation Executive Order and potential for tariffs…In our view, this underscores a need for the industry to pursue novel innovations over incremental life cycle management strategies — a dynamic which we believe could lead to increased M&A activity,” analyst Haider writes.

Price Action: JNJ stock is down 1.45% at $146.30, BMY stock is down 2.64% at $45.38, and MRK stock is down 2.46% at $74.74 at the last check on Wednesday.

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