CMS Final Rule Closes Drug Formulation Loophole in Medicare Negotiation Program
The Centers for Medicare & Medicaid Services (CMS) has published a final rule for the Medicare Drug Price Negotiation Program, codifying existing guidance and implementing new provisions, notably closing a loophole related to drug formulations. This change, effective December 5, 2026, ensures that the program will identify single-source drugs by aggregating across formulations, including fixed-combination drugs with the same active moieties. Previously, manufacturers could potentially combine a negotiation-eligible drug with an additional ingredient, even one without significant clinical benefit, and market it as a 'new' product. This tactic could have reset the clock on negotiation eligibility, allowing pharmaceutical companies to delay price negotiations and maintain higher prices. The new rule aims to strengthen the integrity of the program by preventing such 'product-hopping' strategies, which have been used to extend monopolies and delay the introduction of lower-cost generic and biosimilar alternativ...
