2027 Drug Price Negotiation Process and Data Elements Announced by CMS
Relevant to: Enrollment and Payment Systems, Drug Pricing, Part D
Each week, we scan the latest CMS memos to find the most important ones that apply for PACE programs. Below is a summary of what you need to know.
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Introduction
The Centers for Medicare & Medicaid Services (CMS) has released the finalized Negotiation Data Elements and Drug Price Negotiation Process information collection request for the initial price applicability year of 2027. This initiative, established under the Inflation Reduction Act of 2022, aims to negotiate fair prices for certain high-expenditure, single-source drugs within Medicare. Drug manufacturers are required to submit their data by March 1, 2025, using the CMS Health Plan Management System portal, to participate in this critical negotiation program.
Key Dates and Deadlines
- Manufacturers must submit their information through the CMS Health Plan Management System (HPMS) by: March 1, 2025
- Members of the public may submit evidence about alternative treatments by: March 1, 2025
- CMS will issue an initial written offer no later than: June 1, 2025
- Statutory written counteroffers will be due 30 days after receipt of the initial offer
PACE Compliance
The memo on the Negotiation Data Elements and Drug Price Negotiation Process has implications for PACE programs because it discusses processes and requirements that may affect the pricing and availability of certain drugs under Medicare. PACE organizations must be aware of how these pricing negotiations might impact the drugs covered and the potential costs to the program.
In particular, PACE programs should:
1. Monitor the list of selected high expenditure, single source drugs that will be subject to price negotiations, as these will be covered under Medicare Part D. Understanding which drugs are selected will be crucial for compliance and budget planning.
2. Be prepared for potential changes in drug pricing, which could impact the overall costs associated with providing medications to enrollees. As negotiation processes might alter the price landscape, PACE programs should revise their budgets accordingly.
3. Stay informed on any updates or changes to the negotiation process, as outlined in section 1194 of the Act, to ensure all relevant factors and data submissions are considered for the selected drugs that apply to PACE enrollees.
By carefully following these developments and being proactive in adjusting to changes in the pricing and negotiation of drugs covered by Medicare, PACE programs can better maintain compliance and financial stability.
Required Actions
The memo outlines the necessary steps and deadlines for drug manufacturers involved in the Medicare Drug Price Negotiation Program. Based on the information provided, here are the required actions:
1. Drug manufacturers must sign an Agreement with CMS and submit their negotiation data elements through the CMS Health Plan Management System (HPMS) by March 1, 2025.
2. Manufacturers are encouraged to register for access to CMS HPMS before the questions for the information collection request become available.
3. If CMS issues a written initial offer by June 1, 2025, manufacturers must submit statutory written counteroffers, if any, within 30 days of receiving the initial offer.
FAQs
- “What is the Medicare Drug Price Negotiation Program?”
- “How many drugs will be selected for negotiation in 2027 under Part D?”
- “What are the Negotiation Data Elements required by CMS?”
- “How can manufacturers submit their negotiation data to CMS?”
- “When is the deadline for manufacturers to respond to the initial offer with a counteroffer?”