August 17, 2026
Centers for Medicare and Medicaid Services
Attn: Dr. Mehmet Oz, Administrator of the Centers for Medicare and Medicaid Services
Submitted on regulations.gov
CMS-4215-P; RIN 0938-AV90
Re: Medicare Drug Price Negotiation Program and Medicare Prescription Drug Benefit Program
On behalf of National Taxpayers Union, the nation’s oldest taxpayer advocacy organization, we write with brief comments on the Centers for Medicare & Medicaid Services’s (CMS) proposed rule for Initial Price Applicability Year (IPAY) 2029 under the Medicare Drug Price Negotiation Program. NTU was founded in 1969 to achieve favorable policy outcomes for taxpayers with Congress and the executive branch. Our experts and advocates engage policymakers on important matters affecting taxpayers in a variety of settings, including administrative actions that impact health care spending. In the prescription drug area of health care policy, NTU’s analysis has indicated that the unique environment of innovation and access can, over the long term, reduce total system costs by obviating more expensive medical procedures and hospital stays.1
On a more granular level, NTU has long raised concerns over various iterations of repealing the non-interference policy in Medicare Part D and imposing price negotiations over prescription drugs covered under the program. To begin with, private-sector negotiations among manufacturers, pharmacies, and other entities were already driving down drug prices in Part D, thereby leaving a succession of Health and Human Services Secretaries (not to mention Congressional Budget Office (CBO) Directors) unable to certify that a more coercive government-driven negotiation scheme could produce better savings.
To give just one example, in 2009, then-CBO Director Elmendorf told the Senate Finance Committee: “[W]e, as an organization, still believe that granting the Secretary of HHS additional authority to negotiate for lower drug prices would have little, if any, effect on prices for the same reason that my predecessors have explained, which is that . . . private drug plans are already negotiating drug prices . . .”2
Furthermore, for direct federal price “negotiation” to obtain lower price outcomes, additional, equally coercive measures would need to be enacted alongside it. An NTU-led coalition of organizations explained this in 2017:
Critics of the current process for determining drug prices claim that there either are no real negotiations or that the secretary should be given the authority to negotiate. The first claim is patently false. In regard to allowing the secretary to negotiate prices, CBO has stated that changing the non-interference clause would have a negligible impact on costs, unless HHS established a formulary, which would lead to a restrictive, limited list of medications eligible for reimbursement by Medicare. In other words, there would be price controls on the drugs, and some medications that are now covered by the program would be cut off.3
Nonetheless, in 2021, the Inflation Reduction Act (IRA) charted a different but equally destructive pathway through Section 5000D of the new law that involved price negotiations backed by the force of a 95% excise tax on worldwide sales of manufacturers that refused to submit to the federal government’s final price dictates for select lists of drugs in Medicare Part D and Part B. In 2024, as the tax began to take effect, dozens of economic and health care experts warned on an NTU-organized open letter to policymakers:
Section 5000D is not normal policy; rather, it was created to enforce price controls. Imposing price controls on one part of Medicare would lead to higher costs for beneficiaries elsewhere, whether through higher premiums or increased costs in other parts of Medicare. In general, enforcing prices set at below-market rates leads to shortages, squeezes the cost bubble toward some other portion of the economy, and imposes a deadweight loss on society.
Nonetheless, it is axiomatic that taxing a product or service at exorbitant rates tends to reduce its availability. The very existence of a 95 percent excise tax could therefore lead to shortages in the prescription drugs that patients need, as well as less innovation toward future cures as manufacturers are deterred from engaging in R&D that could carry a new 95 percent premium. Taxpayers could no longer count on as many future drug breakthroughs to bend the cost curve of more expensive treatments such as surgeries and hospital stays in government healthcare programs. The policy goal should be to encourage life-saving treatments that benefit seniors in Medicare, and ultimately, all taxpayers.4
The progression of Section 5000D of the IRA appears to be unfolding as taxpayer advocates had feared. So far, according to the Incubate Coalition’s Life Sciences Investment Tracker, 56 research programs and 26 drug developments have been discontinued since passage of the IRA.5
This disinvestment would almost certainly be much worse, were it not for the pro-research and pro-investment provisions of the One Big Beautiful Bill Act signed into law in July of 2025. That law’s provisions making permanent full and immediate expensing, as well as extending proper tax treatment of R&D expenses, have helped to support more than half a trillion dollars of U.S.-based pharmaceutical investment so far.6 For its part, the IRA's original promises of a Part D redesign that would lead to budgetary savings of $129 billion have rapidly evaporated. CBO now estimates that the redesign, which included the drug negotiation provision but contained other volatile elements as well, could run $170 to $270 billion over original projections over the next ten years.7
But, to be even more specific, in July of 2024, NTU warned of the very eventuality illustrated by the proposed Opdivo policy that has come to pass in CMS-4215-P:
Depending on how the QSSD definition is finalized, the loss of R&D could be even more substantial, since the expansive draft definition would essentially combine all indications, delivery systems, and drug dosages into one QSSD. Concerning too, is the possibility that companies will not continue to develop clinical testing of drugs after initial approval. New indications could be discovered from continued research post-approval, but this proposed incentive system substantially reduces this likelihood if companies know they could be subjected to price controls [emphasis added].8
This prediction is not a gifted prophecy. It is, unfortunately, a progression of a law that is growing in its capacity to inflict damage on the entire health care ecosystem, with taxpayers suffering collateral harm.
NTU continues to recommend repeal of Section 5000D, and a wholesale reevaluation of all the IRA’s provisions pertaining to prescription drugs. We also have recommended that the Trump Administration avoid other price-setting regimes such as the “Most Favored Nation” rulemaking issued in July 2025.9 Nonetheless, with the immediate issue at hand of IPAY 2029, CMS has the opportunity to at least prevent the worst anti-taxpayer effects from metastasizing even more deeply into the prescription drug ecosystem.
A vivid illustration of how CMS-4215-P could harm taxpayers is how this round of IPAY proposes to interpret uses of the drug Opdivo. In reality, any drug could serve as an archetype, and it is precisely this fact that gives us pause: regardless of the particular drug that might be subject to price negotiations, the precedent that could be set through CMS-4215-P is what concerns taxpayers the most.
Treating the subcutaneous and intravenous versions of Opdivo as the same drug for the purposes of Medicare’s price setting program undermines the interests of taxpayers by limiting the deployment of a medical innovation that can reduce the time patients spend in costly clinical settings. For taxpayers, the relevant question is not if Medicare can purchase a drug for a lower, government-set price. Rather, it is whether federal health care programs can deliver care at the lowest overall cost over the long-term. This requires considering factors such as routes of administration and the clinical settings in which those therapies are delivered, as well as any potential downstream savings that occur when patients receive treatments through less invasive and resource-intensive means.
Subcutaneous formulations offer patients more than just convenience—they minimize the amount of time spent in clinical settings and lower the overall burden of care. Intravenous therapies require extensive equipment and preparation, venous access, and generally entail regular visits to clinical settings, such as hospital infusion centers. On the other hand, subcutaneous therapies significantly reduce those burdens. For example, Opdivo Qvantig, the subcutaneous version of nivolumab, can be administered in as little as five minutes. In contrast, the intravenous formulation of Opdivo requires at least 30 minutes to be administered.10 While the difference may seem relatively trivial, over the long term, these time savings reduce overall health care utilization. Indeed, a study11 published in the journal Value In Health estimates that switching 50% of Medicare patients to subcutaneous Opdivo formulations could save approximately $637,000 per U.S. health plan over three years.
By limiting the supply and deployment of a cost-effective treatment, treating both Opdivo formulations as the same QSSD would be self-defeating for Medicare. Bringing Opdivo Qvantig to market was hardly a get-rich-quick scheme. Developing the drug required over a decade of scientific research, including two randomized clinical trials that enrolled hundreds of patients across more than a dozen countries. Yet, CMS’s proposal would subject the drug’s subcutaneous formulation to the same Maximum Fair Price (MFP) as the original intravenous medication, despite the additional costs and regulatory approvals. This sends a credible signal to manufacturers that medical innovations that improve outcomes for patients will not be rewarded. Setting drug prices below the cost of research and development doesn’t lead to increased efficiency, it simply discourages private investment in medical innovation.
Taxpayers have a compelling interest in policies that encourage the use of therapies that limit the amount of time patients spend in expensive clinical settings, especially hospitals. Hospital care is the single largest component of national health expenditures in recent years.12 Between 2022 and 2024, spending on hospital care represented 40% of the overall growth in national health spending.13 This surge outpaced every other source of medical spending, including physician services and prescription drugs. According to CMS, in 2024, hospital prices rose at their sharpest rate since 2007.14 The burden hospital spending imposes on Medicare is an urgent problem: the fund that pays for beneficiaries’ hospital stays is currently projected to run out of money by 2033 if no reforms are enacted.15
Beyond the costs to taxpayers, this proposed rule also raises serious questions about CMS’s regulatory assertions potentially clashing with those of the Food and Drug Administration (FDA). Under the Inflation Reduction Act, drugs are selected for inclusion in Medicare’s price setting program based on their approval by the FDA. Both Opdivo formulations underwent their own separate scientific review processes. However, CMS is treating these distinct products as the same for the purposes of drug pricing. This undermines the FDA, which has determined that these drugs are distinct with unique characteristics. Questions over whether CMS has the authority to override the FDA’s findings aside, it is important to remember that health care regulations are among the most complex in the federal government’s entire guidance ecosphere. Other actors, including not only FDA but also other federal entities, state agencies, and last but not least the entire private sector, need clarity and certainty to be able to comply with the law. No one inside or outside the government benefits from a tenuous situation over what counts as a distinct drug for price negotiation purposes.
The Administration has launched several laudable initiatives in the health care space that promise genuine savings and accountability for taxpayers, most recently with its 340B payment pilot proposal that would explore ways to end the program’s flawed “pay and chase” approach.16 Furthermore, the One Big Beautiful Bill Act that President Trump championed wisely clarified that “orphan drugs remain exempt from government price controls even if they receive additional indications.”17 The IRA’s drug price negotiation provisions, however, remain fiscally problematic. Absent an effort toward repeal, it is important to avoid policies that would worsen the provisions’ deleterious impact.
For these reasons, we strongly urge CMS to withdraw its proposal and to maintain a framework that recognizes distinct FDA-approved therapies for the purposes of price setting in Medicare.
Thank you for your consideration, and should you have any questions, we are at your service.
Sincerely and Respectfully,
Pete Sepp, President
National Taxpayers Union
Alexander Ciccone, Policy and Government Affairs Manager
National Taxpayers Union
1 See, for example: How Much is Medicine Worth to the American Taxpayer? A Cost-Benefit Analysis - Publications - National Taxpayers Union.
2 See reference in: Drug Price Negotiations: When the Savings Ain't So - Publications - National Taxpayers Union.
3 See the coalition letter at: Keep Successful & Cost-Saving Drug Prices for Medicare Part D - Publications - National Taxpayers Union.
4 See the letter at: Economic, Legal, Tax, and Health Policy Experts Agree: Scrap the Punitive, Unworkable, and Indefensible Excise Tax on Prescription Drugs - Publications - National Taxpayers Union.
5 For further information, see: Rare Disease Patients Deserve Cures, Too - American Thinker and Life Sciences Investment Tracker | Incubate Coalition.
6 See, for example, A Case Study in Smart Tax Policy: Pharma's U.S. Manufacturing Boom - Publications - National Taxpayers Union.
7 See the estimates at: Developments in CBO's Projections for Medicare Part D | Congressional Budget Office.
8 See the comments at: NTU Comments on Qualifying Single Source Drugs Rulemaking - Publications - National Taxpayers Union.
9 See the comments at: Most Favored Nation Drug Pricing Model Won't Cut Costs for Americans - Publications - National Taxpayers Union.
10 Subcutaneous Injection Immunotherapy Treatment | OPDIVO Qvantig®.
11 https://www.valueinhealthjournal.com/article/S1098-3015(25)00575-3/fulltext.
12 Hospitals’ Perverse Incentives Are Inflating Healthcare Costs | RealClearHealth.
13 Hospital Spending Accounted for 40% of the Growth in National Health Spending Between 2022 and 2024 | KFF.
14 National Health Care Spending Increased 7.2 Percent In 2024 As Utilization Remained Elevated | Health Affairs.
15 What’s in the 2026 Medicare Trustees Report? • Bipartisan Policy Center.
16 See NTU’s comments at: 340B Rebate Pilot Can Provide Valuable Lessons for Future Reform - Publications - National Taxpayers Union.
17 Rare Disease Patients Deserve Cures, Too - American Thinker.