The Centers for Medicare & Medicaid Services (CMS) has released and solicited comment on its draft Calendar Year (CY) 2026 Part D Redesign Program Instructions. This document, once final, would set Part D policies for implementing the major benefit design overhaul enacted under the Inflation Reduction Act (IRA) for 2026.
Many of the IRA's benefit changes, including a $2,000 out-of-pocket cap for beneficiaries (increasing to $2,100 next year), a new manufacturer discount program, and reallocation of liability in the catastrophic phase of the Part D benefit between plans and CMS have already taken effect. In this relatively short document, for 2026, CMS relies on and incorporates prior guidance for implementing these changes, making marginal changes and adopting new policies in specific limited areas.
The main area of new policymaking in the draft guidance relates to the one major Part D-related element of IRA that will begin in CY 2026, the availability of ten selected drugs with negotiated Maximum Fair Prices (MFP) under IRA's Medicare Drug Price Negotiation Program. The document lays out proposals related to the possibility that a selected drug might face new competition from a therapeutically equivalent generic drug or biosimilar during the year when a MFP is in place, in a way that potentially expands plans' ability to remove selected drugs and biologicals from formularies mid-year.
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