The Permanent Program: Rethinking Pharma Strategy Under CMS-4215-P
Written by Chris Stewart, VP Value & Access
On June 16, 2026, CMS did something a lot of us in the industry had been quietly bracing for. The agency issued a proposed rule (CMS-4215-P) that would codify policies established in guidance documents for the Medicare Drug Price Negotiation Program for initial price applicability year 2029 and beyond1. Translation? The training wheels are coming off. What used to be a fluid, guidance-driven program, one that manufacturers could reasonably argue with (and occasionally shape), is about to become permanent regulation.
Here are the five takeaways manufacturers need to prepare for:
1. The Program Is Becoming Permanent Architecture, Not a Policy Experiment
For initial price applicability years 2026 through 2028, the law directed CMS to implement the Negotiation Program through program instruction and other forms of program guidance. With that instruction authority expiring, CMS is now proposing to codify the Negotiation Program for 2029 and beyond.1,2, 3
That shift matters more than it sounds. Guidance can be revised, softened, litigated around. Regulation is a different animal entirely. As CMS Administrator Dr. Mehmet Oz put it, “We are moving from annual updates to a permanent, predictable framework.”4 Predictable for CMS for sure. For manufacturers, it means compliance thinking has to graduate into long-term portfolio planning.
Why this matters: The question is no longer whether Medicare negotiation will shape pricing strategy. The question is how organizations adapt to a world where it becomes a permanent operating reality.
2. CMS Is Closing the Reformulation Loophole (and It’s Not Subtle About It)
The rule proposes a narrow modification of the policy used to identify qualifying single source drugs to address potential program integrity concerns posed by certain new formulations.4
Reading between the lines, this means one thing: CMS has been watching. Products that add ingredients to create a “new” subcutaneous version, or that tweak a fixed-combination product just enough to reset the clock, will no longer be marked “safe” from qualifying. This new modification proposes aggregating like products together for selection purposes when they share the same core active ingredient.
Why this matters: CMS is signaling that innovation must demonstrate meaningful clinical differentiation, not just formulation evolution.
3. Transparency Just Became a Strategic Capability
If your organization still thinks of data submissions as a compliance chore, you’re already behind. Primary Manufacturers of each selected drug must submit information on the non-Federal Average Manufacturer Price (non-FAMP) and any information CMS requires to carry out the Negotiation Program, including information related to the manufacturer-specific data factors such as research and development costs (and the extent to which they have been recouped), unit costs to produce and distribute, and prior federal support to discover and develop the drug.1
CMS wants more. CMS proposes to codify these policies, including submission requirements for Primary Manufacturers to update submitted data, and how CMS will consider evidence from comparative effectiveness studies. The rule also emphasizes continuing to increase transparency in the Negotiation Program.
Here’s the practical read. The manufacturers who “win” in negotiations will be the ones with disciplined evidence generation strategies baked in from Phase 2. Comparative effectiveness data and real-world evidence are the manufacturer-specific narratives that hold up under the public scrutiny of CMS negotiation.
Why this matters: In the next phase of Medicare negotiation, evidence isn’t just supportive. It becomes a negotiating asset.
4. Biosimilars and Generics Remain the Escape Valve, But With New Guardrails
The Negotiation Program Agreement will remain in effect until the selected drug is no longer considered a selected drug due to a determination that a generic drug is approved or a biosimilar is licensed and that the generic drug or biosimilar is subject to Bona Fide Marketing.
The proposed definition of “Bona Fide Marketing” (in my own words) means the heavy lifting has occurred. Not a token launch. Not a paper approval. Actual, meaningful competition in the market that Part D plan sponsors can incorporate into their formulary strategies.
For originator manufacturers, this reframes competitive intelligence. Knowing when your biosimilar competitor crosses the “bona fide” threshold could reset your entire pricing posture. For biosimilar and generic manufacturers, it’s increased pressure to prove real market presence.
Why this matters: The timing of biosimilar launches, commercialization strategies, and competitive market entry may become even more important determinants of negotiation exposure.
5. Negotiation Is No Longer a One-Time Event. It’s Lifecycle Management.
Here’s the piece that got buried in most of the press coverage. The proposed rule includes policies for negotiating and renegotiating high-cost, single-source drugs beginning with initial price applicability year 2029. CMS can also select drugs for renegotiation if selected drugs with an agreed-upon MFP meet certain eligibility and selection criteria.1,2,3
Renegotiation. Let that word sit for a minute. It means the MFP you land on in 2029 isn’t necessarily the MFP you live with forever. New evidence, new indications, and new market conditions are all fair game for CMS to reopen the conversation. The negotiation isn’t over when it’s over.
Why this matters: Negotiation is becoming an ongoing lifecycle event rather than a one-time milestone. Launch planning, evidence development, indication sequencing, and lifecycle management strategies may all need to account for future renegotiation risk.
In Conclusion
Look, I’ve watched this industry adapt to OBRA ’90, to Part D, to the ACA, and the IRA. We tend to underestimate the friction of new rules early, then overcorrect once the enforcement teeth show up. The manufacturers doing this well right now aren’t panicking. They’re rebuilding their evidence engines, rethinking lifecycle plays, and getting their commercial and policy teams into the same rooms.
There will be a 60-day public comment period on the Negotiation Program proposed rule, closing on August 17, 2026. Use it. Comments matter more when the rule is still ink on paper than after it’s codified in the CFR.
Want to discuss what this could mean for your products? Connect with Petauri Advisors today.
References
- Centers for Medicare & Medicaid Services. Fact Sheet: Medicare Drug Price Negotiation Program Proposed Rule (CMS-4215-P). June 16, 2026. Available at: CMS Fact Sheet. Accessed July 24, 2026.
- Inflation Reduction Act of 2022, Pub. L. No. 117-169, §§ 11001-11002.
- Social Security Act, §§ 1191-1195.
- Centers for Medicare & Medicaid Services. CMS Proposed Rule Locks in Lower Prices and Fosters Innovation for the Medicare Drug Price Negotiation Program. Press Release. June 12, 2026.
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