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What Awaits in the First Year of Medicare Drug Price Negotiations? CMS Issues Guidance and Solicits Comment on the 2026 Inflation Reduction Act Part D Negotiation Process

On March 15, 2023, the Centers for Medicare & Medicaid Services (“CMS”) issued an initial guidance memorandum (“Memorandum”) describing how it proposes to implement the Inflation Reduction Act Medicare Drug Price Negotiation Program (“Negotiation Program”) for the Initial Price Applicability Year of 2026 (the “Initial Year”). In the Memorandum, CMS provides further guidance regarding (i) how it intends to select the Medicare Part D drugs and biologics for which it will negotiate a maximum fair price (“MFP”) for the Initial Year (the “Selected Drugs”), (ii) the data and evidence that manufacturers will be required to submit that will inform CMS’s initial price proposals, (iii) the structure of the negotiation process, and (iv) implementation and enforcement of the MFP.

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Safeguarding American Innovation Act Moves Forward in Senate Republicans’ HEALS Package

Practices: Health Care

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Earlier this week, the Safeguarding American Innovation Act (SAIA) bill, spearheaded by Senators Ron Portman and Tom Carper, was re-introduced as part of the package of bills in the Senate Republicans’ proposed Health, Economic Assistance, Liability Protection and Schools (HEALS) Act for “Phase 4” economic relief for COVID-19. The SAIA was included in Senator Lindsay Graham’s bill, Restoring Critical Supply Chains and Security Act, which is focused on rebuilding a supply chain in the United States and protecting against national security threats perceived to be arising from the People’s Republic of China. As we wrote last month, the SAIA includes several controversial provisions that will have significant impact on universities, academic medical centers and others who receive federal research funding. Among other concerns, the SAIA bill would:

  • Lower the annual threshold for reporting foreign gifts from $250,000 to $50,000,
  • Direct changes to grant applications to enable “uniformity” rather than consistency, and
  • Expand the U.S. Code to criminalize investigators’ failure to disclose a broadly defined category of “outside compensation,” which may be unrelated to their U.S. government-funded activities.

With a foothold into the HEALS Act, the SAIA’s prospects for passage are stronger, but there is still a lot of negotiation with the House of Representatives required to complete the funding bill. Senator Portman advocated again for the bill on the Senate Floor yesterday. But given expressed opposition from advocates for universities and academic medical centers, prospects for passage remain uncertain.

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