Proposed Rule for 2027 Physician Fee Schedule and 340B Program Changes
The Centers for Medicare & Medicaid Services (CMS) has issued the proposed rule for the 2027 Physician Fee Schedule, as detailed in the Federal Register on July 16, 2026. Stakeholders have the opportunity to provide feedback until September 14, 2026. The draft mandates that Medicare providers involved in the 340B program submit data for Part D claims beginning January 1, 2027. CMS intends to leverage this data to improve the accuracy of future 340B repository considerations, excluding 340B units from manufacturer Part D inflation rebate calculations.
Additional proposed adjustments to the Part D inflation rebate program include a new definition for "first marketed date." In conjunction with these changes, CMS has released draft guidance regarding the enforcement of the Maximum Fair Price under the Medicare Drug Price Negotiation Program, which is set to commence in 2028. CMS is actively seeking feedback on this guidance until September 18, 2026, aiming to refine the policy by detailing data flow and payment processes for certain Part B drugs in 2028.
President Trump's announcement on July 21, 2026, confirmed the continuation of zero tariffs on generic drugs imported into the U.S. until August 2026, with tariff increases expected in subsequent years. Discussions regarding the Most Favored Nation drug pricing policy and its impact on international markets persist among industry participants, highlighting the ongoing discourse in pharmaceutical pricing strategies.
The recently concluded 340B Coalition Summer Conference in Washington, D.C., featured input from CMS representatives, yet notably lacked speakers from the Health Resources & Services Administration (HRSA). Meanwhile, HRSA's proposal for 340B rebates is currently undergoing review by the Office of Management and Budget, signaling potential regulatory shifts in the program's administration.
On the judicial front, the U.S. Court of Appeals for the D.C. Circuit upheld a previous ruling allowing HRSA to mandate manufacturer approval before implementing rebate models. Additionally, the Arkansas Attorney General has launched lawsuits against pharmaceutical manufacturers for alleged violations of the state's 340B contract pharmacy laws, while litigation concerning the program's "patient" definition continues to evolve.
In Colorado, legal proceedings have resulted in a preliminary injunction stopping the Prescription Drug Affordability Board's upper payment limit. Other states are considering similar initiatives, emphasizing the importance of regulatory compliance within pharmaceutical markets. These developments continue to influence the insurance industry's interactions with drug pricing, risk management, and distribution strategies, underscoring the sector's need to adapt to evolving legal and regulatory landscapes.