Health Affairs April 17, 2024
The Inflation Reduction Act (IRA) of 2022 authorizes the federal government to set the maximum fair price (MFP) for select medicines covered by Medicare. The Centers for Medicare and Medicaid Services (CMS) announced the first 10 drugs selected for price setting on August 29, 2023, with the MFPs effective on January 1, 2026. Last spring, CMS released initial draft guidance regarding its plan for implementing the drug pricing program and then later released the final guidance for 2026 on June 30, 2023.
As part of the process to set drug prices, the law requires that CMS consider the clinical benefit of the selected drugs, including evidence on comparative effectiveness relative to therapeutic alternatives or comparators. Biopharmaceutical manufacturers with drugs selected...
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