Medicare Drug Price Negotiations Latest: Kiplinger Economic Forecasts

Early signs have emerged of how these key drug price negotiations will be handled.

Doctors hand showing Medicare checklist
(Image credit: Getty)

Healthcare, health insurance and Medicare are hot topics and controversial topics at times too. Developments in this sector naturally impact our well-being and they also have a major effect on the economy and political circles. 

To help you understand what is going on and what we expect to happen in the future, our highly-experienced Kiplinger Letter team will keep you abreast of the latest developments and forecasts (Get a free issue of The Kiplinger Letter or subscribe). You'll get all the latest news first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here’s the latest...

Some early signs of how Medicare will handle drug price negotiations: Officials plan to announce the initial group of drugs later this year, the first 10 of 140 drugs for which the Centers for Medicare & Medicaid Services (opens in new tab) (CMS) will be able to negotiate the price by 2033. 

Subscribe to Kiplinger’s Personal Finance

Be a smarter, better informed investor.

Save up to 74%

Sign up for Kiplinger’s Free E-Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of expert advice - straight to your e-mail.

Sign up

This will give manufacturers time to prepare for talks, which will start for Medicare Part D drugs in 2026 and 2027.

Among the factors that CMS will consider in valuing a drug:

  • Clinical benefits
  • The net price of alternatives
  • Research costs
  • Revenue
  • Patent protections and 
  • Federal funding

The industry is warning about lower investment in certain kinds of drugs, namely small-molecule drugs, which are exempt from negotiations for seven years after approval by the Food and Drug Administration (opens in new tab) (FDA) vs. 11 years for large-molecule drugs or biologics. Small-molecule drugs are manufactured via chemical synthesis and include things like aspirin and other “medicine cabinet” pharmaceuticals.

This forecast first appeared in The Kiplinger Letter. Since 1925, the Letter has helped millions of business executives and investors profit by providing reliable forecasts on business and the economy, as well as what to expect from Washington. Subscribe or get a free issue of The Kiplinger Letter.

Matthew Housiaux
Reporter, The Kiplinger Letter
Housiaux covers the White House and state and local government for The Kiplinger Letter. Before joining Kiplinger in June 2016, he lived in Sioux Falls, SD, where he was the forum editor of Augustana University's student newspaper, the Mirror. He also contributed stories to the Borgen Project, a Seattle-based nonprofit focused on raising awareness of global poverty. He earned a B.A. in history and journalism from Augustana University.