Part D plans would have to cover selected drugs at the MFP

A federal proposal published June 16 would give Medicare’s drug price negotiation program a more durable home in federal regulations. The Centers for Medicare & Medicaid Services, or CMS, says it wants to codify the Medicare Drug Price Negotiation Program and add related policies for the Medicare Prescription Drug Benefit Program, better known as Part D.

That matters because the negotiation program is not just a pricing exercise. It sits inside the part of Medicare that helps cover prescriptions for millions of people. The rules CMS writes can shape which drugs plans must include, how negotiated prices are used and how manufacturers respond when a drug is selected for a lower price.

The proposal is tied to the Inflation Reduction Act of 2022, which created the negotiation framework. CMS says it is now moving from launch-era guidance to a more complete rulebook. For patients, plans and drugmakers, that means the program would be governed less by temporary instructions and more by standing regulations.

What CMS wants to lock in

CMS says it would add a new Part 429 to the Code of Federal Regulations for the negotiation program and revise Part 423, which covers Medicare’s prescription drug benefit. In plain language, the agency is trying to fit the negotiation system more tightly into the normal machinery of Medicare drug coverage.

The agency says the final version would apply starting with the initial price applicability year 2029 and the years after that. That is the next major cycle for selection and renegotiation under the program, so the rules CMS is writing now are meant to govern that round and the ones that follow.

The proposal also makes clear that CMS is not treating the negotiation program as separate from the rest of Medicare drug policy. Instead, it is trying to line up the pricing rules with the coverage rules that Part D plans already follow. That is where many of the practical effects would show up.

How Part D plans would have to respond

One of the clearest changes in the proposal deals with what Part D plans would have to cover. CMS says plan sponsors would have to include each Part D drug that is a selected drug when a maximum fair price, or MFP, is in effect for that year. The proposed rule also says formularies would have to include all covered dosage forms and strengths of a selected drug when the MFP applies.

That sounds technical, but the point is straightforward. If Medicare has selected a drug for negotiation and a lower federal price is in place, Part D plans would need to treat that drug inside the framework CMS sets. They would not be free to ignore the selected version or carve out the covered forms and strengths that fall under the negotiated price.

CMS also proposes to identify a single price for each selected drug, including drugs that come in more than one dosage form or strength. In practice, that creates a clearer payment target for plans and manufacturers. It also makes it easier for Medicare to say which price applies when the drug is dispensed.

The payment rule matters at the pharmacy counter, too. Under the law CMS cites, the negotiated price used for payment would not be allowed to exceed the MFP for the drug, plus any dispensing fees. For people with Medicare, that is where the policy becomes tangible. The price in the program would not just be a number on paper. It would be the number the system has to use when the drug is paid for under Part D.