Medicare rule could bring subcutaneous Keytruda and Opdivo under price negotiations

A federal rule proposed for 2029 aims to close a loophole that currently shields medicines moving from intravenous to subcutaneous administration from Medicare price negotiations. The Centers for Medicare & Medicaid Services said the change would target newer injection forms of existing cancer immunotherapies.

Under the proposal, the subcutaneous versions of drugs such as Keytruda and Opdivo would be subject to the same price‑setting process as their IV counterparts. However, Medicare could exempt the newer formulation if biosimilar versions of the IV drug enter the market and compete on price.

The rule would most directly affect Merck, the maker of Keytruda, and Bristol Myers Squibb, the developer of Opdivo. It also involves Halozyme, which supplied the delivery technology that enabled Opdivo and Johnson & Johnson’s Darzalex to be given as subcutaneous shots. Halozyme expects little to no impact on its royalty revenues through at least 2035.

The move is part of the government’s ongoing discussions with pharmaceutical manufacturers about drug pricing, marking the fourth annual round of talks aimed at controlling Medicare drug costs.