U.S. Code » Title 42 » Chapter CHAPTER 7— SOCIAL SECURITY › Subchapter SUBCHAPTER XI— GENERAL PROVISIONS, PEER REVIEW, AND ADMINISTRATIVE SIMPLIFICATION › Part Part E— Price Negotiation Program To Lower Prices for Certain High-Priced Single Source Drugs

42 U.S.C. § 1320f

Establishment of program

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(a) In generalThe Secretary shall establish a Drug Price Negotiation Program (in this part referred to as the “program”). Under the program, with respect to each price applicability period, the Secretary shall—(1) publish a list of selected drugs in accordance with section 1320f–1 of this title;(2) enter into agreements with manufacturers of selected drugs with respect to such period, in accordance with section 1320f–2 of this title;(3) negotiate and, if applicable, renegotiate maximum fair prices for such selected drugs, in accordance with section 1320f–3 of this title; 11 So in original. Probably should be followed by “and”.(4) carry out the publication and administrative duties and compliance monitoring in accordance with sections 1320f–4 and 1320f–5 of this title.(b) Definitions relating to timingFor purposes of this part:(1) Initial price applicability year

The term “initial price applicability year” means a year (beginning with 2026).

(2) Price applicability period

The term “price applicability period” means, with respect to a qualifying single source drug, the period beginning with the first initial price applicability year with respect to which such drug is a selected drug and ending with the last year during which the drug is a selected drug.

(3) Selected drug publication date

The term “selected drug publication date” means, with respect to each initial price applicability year, February 1 of the year that begins 2 years prior to such year.

(4) Negotiation periodThe term “negotiation period” means, with respect to an initial price applicability year with respect to a selected drug, the period—(A) beginning on the sooner of—(i) the date on which the manufacturer of the drug and the Secretary enter into an agreement under section 1320f–2 of this title with respect to such drug; or(ii) February 28 following the selected drug publication date with respect to such selected drug; and(B) ending on November 1 of the year that begins 2 years prior to the initial price applicability year.(c) Other definitionsFor purposes of this part:(1) Manufacturer

The term “manufacturer” has the meaning given that term in section 1395w–3a(c)(6)(A) of this title.

(2) Maximum fair price eligible individualThe term “maximum fair price eligible individual” means, with respect to a selected drug—(A) in the case such drug is dispensed to the individual at a pharmacy, by a mail order service, or by another dispenser, an individual who is enrolled in a prescription drug plan under part D of subchapter XVIII or an MA–PD plan under part C of such subchapter if coverage is provided under such plan for such selected drug; and(B) in the case such drug is furnished or administered to the individual by a hospital, physician, or other provider of services or supplier, an individual who is enrolled under part B of subchapter XVIII, including an individual who is enrolled in an MA plan under part C of such subchapter, if payment may be made under part B for such selected drug.(3) Maximum fair price

The term “maximum fair price” means, with respect to a year during a price applicability period and with respect to a selected drug (as defined in section 1320f–1(c) of this title) with respect to such period, the price negotiated pursuant to section 1320f–3 of this title, and updated pursuant to section 1320f–4(b) of this title, as applicable, for such drug and year.

(4) Reference product

The term “reference product” has the meaning given such term in section 262(i) of this title.

(5) Total expenditures

The term “total expenditures” includes, in the case of expenditures with respect to part D of subchapter XVIII, the total gross covered prescription drug costs (as defined in section 1395w–115(b)(3) of this title). The term “total expenditures” excludes, in the case of expenditures with respect to part B of such subchapter, expenditures for a drug or biological product that are bundled or packaged into the payment for another service.

(6) Unit

The term “unit” means, with respect to a drug or biological product, the lowest identifiable amount (such as a capsule or tablet, milligram of molecules, or grams) of the drug or biological product that is dispensed or furnished.

(d) Timing for initial price applicability year 2026Notwithstanding the provisions of this part, in the case of initial price applicability year 2026, the following rules shall apply for purposes of implementing the program:(1) Subsection (b)(3) shall be applied by substituting “September 1, 2023” for “, with respect to each initial price applicability year, February 1 of the year that begins 2 years prior to such year”.(2) Subsection (b)(4) shall be applied—(A) in subparagraph (A)(ii), by substituting “October 1, 2023” for “February 28 following the selected drug publication date with respect to such selected drug”; and(B) in subparagraph (B), by substituting “August 1, 2024” for “November 1 of the year that begins 2 years prior to the initial price applicability year”.(3)Section 1320f–1 of this title shall be applied—(A) in subsection (b)(1)(A), by substituting “during the period beginning on June 1, 2022, and ending on May 31, 2023” for “during the most recent period of 12 months prior to the selected drug publication date (but ending not later than October 31 of the year prior to the year of such drug publication date), with respect to such year, for which data are available”; and(B) in subsection (d)(1)(A), by substituting “during the period beginning on June 1, 2022, and ending on May 31, 2023” for “during the most recent period for which data are available of at least 12 months prior to the selected drug publication date (but ending no later than October 31 of the year prior to the year of such drug publication date), with respect to such year”.22 So in original. Probably should read as follows: “during the most recent 12-month period for which data are available prior to such selected drug publication date (but ending no later than October 31 of the year prior to the year of such drug publication date)”.(4)Section 1320f–2(a) of this title shall be applied by substituting “October 1, 2023” for “February 28 following the selected drug publication date with respect to such selected drug”.(5)Section 1320f–3(b)(2) of this title shall be applied—(A) in subparagraph (A), by substituting “October 2, 2023” for “March 1 of the year of the selected drug publication date, with respect to the selected drug”;(B) in subparagraph (B), by substituting “February 1, 2024” for “the June 1 following the selected drug publication date”; and(C) in subparagraph (E), by substituting “August 1, 2024” for “the first day of November following the selected drug publication date, with respect to the initial price applicability year”.(6)Section 1320f–4(a)(1) of this title shall be applied by substituting “September 1, 2024” for “November 30 of the year that is 2 years prior to such initial price applicability year”.(Aug. 14, 1935, ch. 531, title XI, § 1191, as added Pub. L. 117–169, title I, § 11001(a), Aug. 16, 2022, 136 Stat. 1833.)Statutory Notes and Related SubsidiariesImplementation for 2026 Through 2028

Pub. L. 117–169, title I, § 11001(c), Aug. 16, 2022, 136 Stat. 1854, provided that: “The Secretary of Health and Human Services shall implement this section [enacting this part and amending sections 1395w–3a, 1395w–22, 1395w–27, 1395w–102, 1395w–104, 1395w–111, 1395w–112, 1395w–115, 1395w–153, and 1396r–8 of this title], including the amendments made by this section, for 2026, 2027, and 2028 by program instruction or other forms of program guidance.”

Notes of Decisions
Cited in 14 cases (14 in the last 5 years), 2023–2025 · leading case: Natl Infusion Ctr. v. Becerra, 116 F.4th 488 (5th Cir. 2024).
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Natl Infusion Ctr. v. Becerra, 116 F.4th 488 (5th Cir. 2024). · cites it 2× “42 U.S.C. § 1320f; see CMS, Medicare Drug Price Negotiation Program: Revised Guidance, Implementation of Sections 1191 – 1198 of the Social Security Act for Initial Price Applicability Year 2026, at 8–11 (June 30, 2023), https://bit.”
AstraZeneca Pharm. LP v. Sec'y United States Dep't of Health & H, 137 F.4th 116 (3rd Cir. 2025). “4 The Negotiation Program defines the term “maximum fair price” to mean, with respect to a selected drug and a given drug-pricing period, “the price negotiated pursuant to [the Negotiation Program], .”
Bristol Myers Squibb Co v. Sec'y United States Dep't of HHS (3rd Cir. 2025). · cites it 33× “18 18 See 42 U.S.C. § 1320f note (allowing CMS to implement the Program by issuing program guidance for program years 2026 through 2028); 2023 Revised Guidance at 92–93 (stating that the 2023 Revised Guidance is being promulgated without notice and comment as final).”
Novo Nordisk Inc v. Sec'y US Dept & Health & Human Servs. (3rd Cir. 2025). · cites it 17× “at 2; see also 42 U.S.C. § 1320f–2(a)(1). Once a manufacturer signs the Agreement, the agency makes a “written initial offer.”
Novartis Pharm. Corp v. Sec'y United States Dep't of Health (3rd Cir. 2025). · cites it 9× “” Agreement at 2; see also 42 U.S.C. § 1320f– 2(a)(1). Once a manufacturer signs the Agreement, the agency makes a “written initial offer.”
Dayton Area Chamber of Com. v. Becerra (S.D. Ohio 2023). · cites it 7× “1 at PageID 18; 42 U.S.C. § 1320f- 3(b)(2)(C). After the manufacturer accepts the offer or the Secretary responds to the counteroffer, the Secretary then sets the maximum fair price for the drug by August 1, 2024.”
Boehringer Ingelheim Pharms., Inc. v. Dep't of Health & Hum. Servs. (2d Cir. 2025). · cites it 6× “1818 (codified in pertinent part at 42 U.S.C. §§ 1320f–1320f-7 and 26 U.S.C. § 5000D), which authorized the Secretary of Health and Human Services to establish a Negotiation Program to limit the cost of certain drugs under Medicare Parts B and D.”
Teva Pharm. USA, Inc. v. Becerra (D.D.C. 2025). · cites it 6× “See 42 U.S.C. §§ 1320f–1320f-7; 26 U.S.C. § 5000D.”
Boehringer Ingelheim Pharm., Inc. v. United States Dep't of Health & Human Servs. (D. Conn. 2024). · cites it 5× “1818 (codified in pertinent part at 42 U.S.C. §§ 1320f–1320f-7 and 26 U.S.C. § 5000D).”
AstraZeneca Pharm. LP v. Becerra (D. Del. 2024). “42 U.S.C. §§ 1320f(b)(1]H{2). The Program’s first price applicability period—the period at issue in this case—begins on January 1, 2026.”
Bristol Myers Squibb Co. v. Becerra (D.N.J. 2024). “See 42 U.S.C. § 1320f et seq. In considering a challenge against the Program brought by Plaintiffs AstraZeneca Pharmaceuticals LP and AstraZeneca AB, our sister court in Delaware carefully and meticulously provided a general background of the Program.”
Johnson & Johnson Health Care Sys. Inc. v. Becerra (D.D.C. 2025). “42 U.S.C. §§ 1320f(c)(2), 1320f-2(a). If a dispensed drug is eligible for a reduced price under both the IRA and the 340B Program, then the covered entity is entitled to the lower price of the two.”
Show all 14 citing cases →
— 42 U.S.C. § 1320f(a)(1) — 1 case
Boehringer Ingelheim Pharm., Inc. v. United States Dep't of Health & Human Servs. (D. Conn. 2024). “1818 (codified in pertinent part at 42 U.S.C. §§ 1320f–1320f-7 and 26 U.S.C. § 5000D).”
— 42 U.S.C. § 1320f(a)(3) — 5 cases
Dayton Area Chamber of Com. v. Becerra (S.D. Ohio 2023). “1 at PageID 18; 42 U.S.C. § 1320f- 3(b)(2)(C). After the manufacturer accepts the offer or the Secretary responds to the counteroffer, the Secretary then sets the maximum fair price for the drug by August 1, 2024.”
Boehringer Ingelheim Pharms., Inc. v. Dep't of Health & Hum. Servs. (2d Cir. 2025). “1818 (codified in pertinent part at 42 U.S.C. §§ 1320f–1320f-7 and 26 U.S.C. § 5000D), which authorized the Secretary of Health and Human Services to establish a Negotiation Program to limit the cost of certain drugs under Medicare Parts B and D.”
Bristol Myers Squibb Co v. Sec'y United States Dep't of HHS (3rd Cir. 2025). “18 18 See 42 U.S.C. § 1320f note (allowing CMS to implement the Program by issuing program guidance for program years 2026 through 2028); 2023 Revised Guidance at 92–93 (stating that the 2023 Revised Guidance is being promulgated without notice and comment as final).”
Novartis Pharm. Corp v. Sec'y United States Dep't of Health (3rd Cir. 2025). “” Agreement at 2; see also 42 U.S.C. § 1320f– 2(a)(1). Once a manufacturer signs the Agreement, the agency makes a “written initial offer.”
Novo Nordisk Inc v. Sec'y US Dept & Health & Human Servs. (3rd Cir. 2025). “at 2; see also 42 U.S.C. § 1320f–2(a)(1). Once a manufacturer signs the Agreement, the agency makes a “written initial offer.”
— 42 U.S.C. § 1320f(b) — 3 cases
AstraZeneca Pharm. LP v. Becerra (D. Del. 2024). “42 U.S.C. §§ 1320f(b)(1]H{2). The Program’s first price applicability period—the period at issue in this case—begins on January 1, 2026.”
Dayton Area Chamber of Com. v. Becerra (S.D. Ohio 2023). “1 at PageID 18; 42 U.S.C. § 1320f- 3(b)(2)(C). After the manufacturer accepts the offer or the Secretary responds to the counteroffer, the Secretary then sets the maximum fair price for the drug by August 1, 2024.”
Boehringer Ingelheim Pharms., Inc. v. Dep't of Health & Hum. Servs. (2d Cir. 2025). “1818 (codified in pertinent part at 42 U.S.C. §§ 1320f–1320f-7 and 26 U.S.C. § 5000D), which authorized the Secretary of Health and Human Services to establish a Negotiation Program to limit the cost of certain drugs under Medicare Parts B and D.”
— 42 U.S.C. § 1320f(b)(1) — 3 cases
Bristol Myers Squibb Co v. Sec'y United States Dep't of HHS (3rd Cir. 2025). “18 18 See 42 U.S.C. § 1320f note (allowing CMS to implement the Program by issuing program guidance for program years 2026 through 2028); 2023 Revised Guidance at 92–93 (stating that the 2023 Revised Guidance is being promulgated without notice and comment as final).”
Novartis Pharm. Corp v. Sec'y United States Dep't of Health (3rd Cir. 2025). “” Agreement at 2; see also 42 U.S.C. § 1320f– 2(a)(1). Once a manufacturer signs the Agreement, the agency makes a “written initial offer.”
Novo Nordisk Inc v. Sec'y US Dept & Health & Human Servs. (3rd Cir. 2025). “at 2; see also 42 U.S.C. § 1320f–2(a)(1). Once a manufacturer signs the Agreement, the agency makes a “written initial offer.”
— 42 U.S.C. § 1320f(b)(2) — 1 case
Teva Pharm. USA, Inc. v. Becerra (D.D.C. 2025). “See 42 U.S.C. §§ 1320f–1320f-7; 26 U.S.C. § 5000D.”
— 42 U.S.C. § 1320f(b)(4) — 1 case
Novo Nordisk Inc v. Sec'y US Dept & Health & Human Servs. (3rd Cir. 2025). “at 2; see also 42 U.S.C. § 1320f–2(a)(1). Once a manufacturer signs the Agreement, the agency makes a “written initial offer.”
— 42 U.S.C. § 1320f(c)(2) — 2 cases
Johnson & Johnson Health Care Sys. Inc. v. Becerra (D.D.C. 2025). “42 U.S.C. §§ 1320f(c)(2), 1320f-2(a). If a dispensed drug is eligible for a reduced price under both the IRA and the 340B Program, then the covered entity is entitled to the lower price of the two.”
Boehringer Ingelheim Pharms., Inc. v. Dep't of Health & Hum. Servs. (2d Cir. 2025). “1818 (codified in pertinent part at 42 U.S.C. §§ 1320f–1320f-7 and 26 U.S.C. § 5000D), which authorized the Secretary of Health and Human Services to establish a Negotiation Program to limit the cost of certain drugs under Medicare Parts B and D.”
— 42 U.S.C. § 1320f(c)(3) — 2 cases
AstraZeneca Pharm. LP v. Sec'y United States Dep't of Health & H, 137 F.4th 116 (3rd Cir. 2025). “4 The Negotiation Program defines the term “maximum fair price” to mean, with respect to a selected drug and a given drug-pricing period, “the price negotiated pursuant to [the Negotiation Program], .”
Bristol Myers Squibb Co v. Sec'y United States Dep't of HHS (3rd Cir. 2025). “18 18 See 42 U.S.C. § 1320f note (allowing CMS to implement the Program by issuing program guidance for program years 2026 through 2028); 2023 Revised Guidance at 92–93 (stating that the 2023 Revised Guidance is being promulgated without notice and comment as final).”
— 42 U.S.C. § 1320f(d) — 3 cases
Bristol Myers Squibb Co v. Sec'y United States Dep't of HHS (3rd Cir. 2025). “18 18 See 42 U.S.C. § 1320f note (allowing CMS to implement the Program by issuing program guidance for program years 2026 through 2028); 2023 Revised Guidance at 92–93 (stating that the 2023 Revised Guidance is being promulgated without notice and comment as final).”
Novartis Pharm. Corp v. Sec'y United States Dep't of Health (3rd Cir. 2025). “” Agreement at 2; see also 42 U.S.C. § 1320f– 2(a)(1). Once a manufacturer signs the Agreement, the agency makes a “written initial offer.”
Novo Nordisk Inc v. Sec'y US Dept & Health & Human Servs. (3rd Cir. 2025). “at 2; see also 42 U.S.C. § 1320f–2(a)(1). Once a manufacturer signs the Agreement, the agency makes a “written initial offer.”
— 42 U.S.C. § 1320f(d)(1) — 1 case
Boehringer Ingelheim Pharm., Inc. v. United States Dep't of Health & Human Servs. (D. Conn. 2024). “1818 (codified in pertinent part at 42 U.S.C. §§ 1320f–1320f-7 and 26 U.S.C. § 5000D).”
— 42 U.S.C. § 1320f(d)(2)(A) — 1 case
Dayton Area Chamber of Com. v. Becerra (S.D. Ohio 2023). “1 at PageID 18; 42 U.S.C. § 1320f- 3(b)(2)(C). After the manufacturer accepts the offer or the Secretary responds to the counteroffer, the Secretary then sets the maximum fair price for the drug by August 1, 2024.”
— 42 U.S.C. § 1320f(d)(4) — 1 case
Boehringer Ingelheim Pharms., Inc. v. Dep't of Health & Hum. Servs. (2d Cir. 2025). “1818 (codified in pertinent part at 42 U.S.C. §§ 1320f–1320f-7 and 26 U.S.C. § 5000D), which authorized the Secretary of Health and Human Services to establish a Negotiation Program to limit the cost of certain drugs under Medicare Parts B and D.”
— 42 U.S.C. § 1320f(d)(5) — 1 case
Dayton Area Chamber of Com. v. Becerra (S.D. Ohio 2023). “1 at PageID 18; 42 U.S.C. § 1320f- 3(b)(2)(C). After the manufacturer accepts the offer or the Secretary responds to the counteroffer, the Secretary then sets the maximum fair price for the drug by August 1, 2024.”
— 42 U.S.C. § 1320f(d)(5)(A) — 2 cases
Dayton Area Chamber of Com. v. Becerra (S.D. Ohio 2023). “1 at PageID 18; 42 U.S.C. § 1320f- 3(b)(2)(C). After the manufacturer accepts the offer or the Secretary responds to the counteroffer, the Secretary then sets the maximum fair price for the drug by August 1, 2024.”
Boehringer Ingelheim Pharms., Inc. v. Dep't of Health & Hum. Servs. (2d Cir. 2025). “1818 (codified in pertinent part at 42 U.S.C. §§ 1320f–1320f-7 and 26 U.S.C. § 5000D), which authorized the Secretary of Health and Human Services to establish a Negotiation Program to limit the cost of certain drugs under Medicare Parts B and D.”
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