The rules are changing. The Trump administration is tightening the screws on how Medicare negotiates drug prices, specifically by plugging a gap manufacturers used to dodge the system. It’s not a surprise move. It’s an intentional closure.
Centers for Medicare and Medicaid Services (CMS) is rewriting the eligibility playbook. They want to stop companies from resetting the negotiation clock just because they tweak a formulation. By codifying these rules—making them permanent rather than temporary guidance—the agency aims to lock in a framework for price talks starting with the 2029 cycle.
Think of it as shutting the back door.
Previously, a drugmaker could add an active ingredient, change how a medicine was delivered, and effectively argue the new version was a different product entirely. That bought time. Time away from price controls. No longer.
Under the proposed change, if adding an ingredient—like hyaluronidase—simply allows an existing biologic to shift from intravenous injection to a subcutaneous one, CMS will group them together. Same drug. Same clock. The original version’s launch date holds. The new one doesn’t get a free pass.
It strengthens the Inflation Reduction Act. The administration says this itself. And logically? It does. The IRA gave the federal government the power, for the first time, to negotiate prices for high-cost drugs covered by Medicare. Seniors and disabled individuals rely on this program. The stakes are high. The numbers are even higher.
The first round of negotiations began earlier. Ten drugs were selected in 2023, with “maximum fair prices” taking effect last January. Now we’re looking at the next wave.
Here’s how eligibility currently works: small molecule drugs must be seven years old and face no serious generic competition. Biologics have a longer leash—11 years post-launch, assuming no bona fide biosimilars are around. And they have to be heavy hitters. The top 50 spenders in Medicare Part D and, starting this year, the top 50 in Part B.
But there was a wrinkle.
As originally written, reformulating a biologic could reset that 11-year clock. CMS intends to erase that option.
Take Keytruda and Opdiva. Blockbuster cancer treatments. Both administered intravenously now. Both nearing patent cliffs in 2028 manufacturers have developed subcutaneous versions. Easier to inject. Potentially more convenient for patients. But under the new proposal, those subcutaneous forms fall under the same negotiation hammer as the IV ones.
Why? Because the active ingredient profile remains largely the same, only the delivery route changes via hyaluronidase. CMS doesn’t see that as a reinvention. They see it as a repackaging effort.
A biosimilar might eventually break up the market monopoly, but not soon enough to matter here. Biosimilar competition for these IV drugs probably won’t land until late 2028 or later. That’s not early enough to trigger an exemption by the February 2027 selection date for upcoming negotiations. So, both the IV and the subcutaneous versions of Keytruda and Opdivoa are likely on the list for 2029 implementation.
Is the industry angry? Probably.
“The proposed rule change strengthens the Inflation Redirection Act by effectively closing a loophole.”
Until now, CMS issued periodic guidance documents—interpretations, if you will—to figure out how to make the law work day-to-day. Laws often leave gaps. Agencies fill them. But guidance is soft. It can be tweaked. It can be challenged. It changes with administrations.
Codification is harder to shift.
By turning these operational details into permanent regulations, CMS creates a sturdier scaffold for every phase of negotiation. Drug selection. Manufacturer agreements. The back-and-forth offer and counter-offer dances. The final publication of what they call maximum fair prices. All of it locked into statute.
The comment period opened recently. Sixty days. Comments due August 17, 20**6. A typo in the original text likely, but the deadline looms. Expect CMS to finalize this somewhere in the autumn.
The clock is ticking for pharma. The loophole is shutting. Whether that means better prices for patients or reduced incentives for innovation is a debate for another article. For now, the path is set. The rules are written. And they are strict.
Will the industry fight back with lawsuits? Maybe. But the message is clear: reformulate it, don’t renegotiate it. You can have convenience, or you can have autonomy. Under this new regime, you won’t have both.
The door isn’t just closing. It’s latching shut. And everyone inside better find their seats.
