CMS Final Rule Advances Medicare Drug Price Negotiation Program for 2026

On April 15, 2025, the Centers for Medicare & Medicaid Services (CMS) issued the Final Rule for Contract Year 2026, updating regulations related to Medicare programs, including Medicare Part D and the new Medicare Drug Price Negotiation Program established under the Inflation Reduction Act.

This program enables CMS to negotiate maximum fair prices (MFP) for select single-source brand-name drugs covered by Medicare Part B and Part D. Drug manufacturers involved must ensure pharmacies and dispensing entities can access these negotiated prices either by upfront price setting or retrospective reimbursement for costs exceeding the MFP.

To support this process, CMS developed the Medicare Transaction Facilitator (MTF), composed of the Data Module and the optional Payment Module. The Data Module facilitates data exchange to expedite retrospective reimbursements, while the Payment Module handles payment transfers and claims adjustments. Starting June 2025, pharmacies will be required to enroll in the MTF Data Module through their Part D plan network participation agreements, with chain pharmacies able to enroll centrally.

Dispensing entities using Pharmacy Service Administrative Organizations (PSAOs) must authorize these entities for Third-Party Support Enrollment to receive refunds. CMS plans to release detailed Technical Assistance as the enrollment period nears, providing further guidance for market participants navigating this new compliance and payment infrastructure.