Overview
CMS is slated to select the next cohort of drugs for the IRA’s Medicare Drug Price Negotiation Program by February 1, 2025, with prices to take effect starting January 1, 2027. A drug that would otherwise be eligible for selection can be removed from the list on the grounds that it qualifies for the temporary Small Biotech Exception or the Biosimilar Delay. Final guidance on these policies for Initial Price Applicability Year (IPAY) 2027 is available here.
Small Biotech Exception
With certain exceptions, the IRA exempts “small biotech drugs” from the Negotiation Program for the years 2026, 2027, and 2028. “Small biotech drugs” include Part D drugs:
- with less than or equal to 1% of total Part D spend on all covered drugs for 2021, and
- that account for greater than or equal to 80% of total Part D spend for all the applicable manufacturer’s drugs in 2021 for which the manufacturer had a Coverage Gap Discount Program (CGDP) agreement in effect under section 1860D-14A of the Social Security Act.
Biosimilar Delay
The Inflation Reduction Act provides for a delay in selecting drugs for negotiation for up to two years if they are biological products where there is a “high likelihood” of biosimilar market entry within two years of the publication date of the selected drug list. Note that the Biosimilar Delay application must be submitted by the biosimilar manufacturer, and the delay will not be granted if the manufacturer of the reference biologics products requires or incentivizes the biosimilar manufacturer to submit the request or takes certain other actions.
Application Process
The application forms are available on the OMB website here (click “all” to see all details). Submissions for the Small Biotech Exception and Biosimilar Delay may be submitted via the CMS Health Plan Management System (CMS HPMS) from November 8, 2024 until 11:59 PST on December 10, 2024. For information regarding access to the CMS HPMS, please click here.