US Medicare issues updated rules for second round of drug negotiations

 The U.S. government will provide more time for negotiations and more chances for drugmakers to submit counter offers during the second round of talks over price cuts for its Medicare program, it said on Wednesday.

The Centers for Medicare and Medicaid Services (CMS), which oversees Medicare, the government health insurance program for millions of Americans age 65 and older and the disabled, by Feb. 1 will select the costliest prescription medications to negotiate on, with prices coming into effect in 2027.

The guidance is being closely watched by pharmaceutical manufacturers who make the 15 drugs likely to get picked for negotiations.

CMS said changes to the process, which came after feedback from patients and drugmakers, include meeting with companies earlier in the process and allowing more opportunities for counter offers.

The agency will now meet with drugmakers before making its initial offer, and will hold one of the three allotted negotiation meetings before the deadline for the first counter offer. If a company chooses to counter the government's offer, it will have two further meetings to negotiate.

"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," a CMS official told reporters on a press call.

"That will provide us with an opportunity to have a dialogue about the initial offer that CMS has sent, and potentially some early thinking from the manufacturer themselves around how they might do a counteroffer."

CMS announced prices for ten drugs in August in its first round of cuts following a year of talks. The prices are set to take effect in January 2026 and will save older Americans $1.5 billion in out of pocket costs, according to the agency.

Next year's talks will take place in a shorter timeframe, with a final decision on prices due by Nov. 30, 2025.

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