CMS proposes rule to close Medicare negotiation loophole for biologics

CMS announced a proposed policy change that would clarify how the Centers for Medicare & Medicaid Services groups products for price negotiations under the Inflation Reduction Act.

The rule targets a perceived loophole that allows manufacturers to split a biologic into multiple products to avoid inclusion in the negotiation pool. Under the IRA, biologics become subject to Medicare price negotiations 11 years after FDA approval.

By defining grouping criteria, CMS aims to ensure that all eligible biologics are captured in the negotiation process, which could affect pricing and market dynamics for biotech firms.