Reform for Expand Medicare’s negotiation power to more drugs.
Executive summary
Medicare’s Drug Price Negotiation Program currently negotiates prices for a limited set of high‑spend Part D drugs, with the first negotiated Maximum Fair Prices taking effect January 1, 2026 and projected to save beneficiaries about $1.5 billion in out‑of‑pocket costs that year and Medicare roughly $6 billion if applied to 2023 spending levels [1] [2] [3]. Policymakers who want to expand Medicare’s negotiation power to more drugs face clear levers—raise the annual drug cap, shorten eligibility timelines, include commercial markets, and broaden statutory authority—but must also reckon with operational, legal, and political headwinds described in CMS and academic analyses [4] [5] [6].
1. What the program already does and the immediate expansion to Part B
The Inflation Reduction Act created a process for CMS to negotiate “maximum fair prices” for select single‑source, high‑expenditure drugs covered by Medicare Part D starting in 2026, and CMS has already set negotiated prices for initial rounds with those MFPs effective January 1, 2026 [1] [7]. By statute CMS is scheduled to expand negotiations to include Part B drugs beginning with the 2028 price applicability year, and CMS has selected a third‑cycle list that for the first time includes drugs payable under Part B with negotiations to occur in 2026 and prices effective in 2028 [8] [6].
2. Why advocates press to expand negotiation to more products
Analysts and advocacy groups argue that the program’s savings are concentrated among a small number of blockbuster products, and widening the scope—more drugs per year, shorter eligibility windows, or even extending negotiated prices into commercial markets—would multiply beneficiary and federal savings and increase market pressure on list and launch prices [4] [9]. Modeling suggests that if negotiated prices had been in effect earlier, the program could have reduced net covered prescription costs substantially across selected drugs, indicating room for larger systemic gains [10] [3].
3. The technical and legal barriers to scaling negotiations
Expanding negotiation beyond the current statutory design raises operational obstacles: identifying the “relevant drug” scope for Part B versus Part D, dealing with physician‑administered biologics, integrating Medicare Advantage and fee‑for‑service payment flows, and producing the data CMS needs to set an MFP are nontrivial tasks highlighted by Brookings and CMS guidance documents [6] [5]. These implementation challenges mean that even with political will, administrative rulemaking and new guidance will be necessary before effective expansion can be operationalized [5] [6].
4. Politics, industry incentives, and competing agendas
The negotiation program sits at the center of partisan and industry battles: the program was a signature provision of the 2022 law and faces political pushback from opponents who argue it could stifle innovation, while manufacturers and some provider groups resist extensions that would encompass physician‑administered therapies or commercial markets [11]. Meanwhile, advocates press further reforms—expanding the number of drugs, shortening the exclusivity window for eligibility, and extending price caps beyond Medicare—to shift market power away from manufacturers [4].
5. Concrete reform options to expand negotiation power
Practical statutory and regulatory reforms already debated in policy literature include: increasing the annual cap on how many drugs CMS can select; shortening the “look‑back” or exclusivity periods that delay eligibility; explicitly authorizing CMS to set prices that influence commercial market rates or require commercial plan parity; and tightening exemptions such as orphan‑drug carve‑outs that currently shrink the eligible pool—each approach would broaden reach but requires legislative change or careful rulemaking [4] [9] [12].
6. Risks, tradeoffs, and recommended safeguards
Expanding negotiation risks unintended consequences—reduced manufacturer participation, strategic relabeling, or shifts in rebate and formulary practices—so reforms should pair expansion with transparency measures, clearer definitions of “drug” scope for Part B biologics, phased implementation, and monitoring of R&D and access outcomes to detect market responses early [6] [5]. CMS’s recent technical guidance and public comment processes provide a template for phased rulemaking and stakeholder input [5].
7. Bottom line
Expanding Medicare’s negotiation power to more drugs is feasible and promising for lowering costs but is not automatic: it requires either statutory changes to increase selection capacity and authority or ambitious, carefully crafted rulemaking to alter eligibility and scope; simultaneously, policymakers must address the operational, legal, and political pushback mapped by CMS, Brookings, and health policy researchers if expanded negotiations are to deliver broad, durable savings without undermining access [4] [6] [5].