SMART Prices Act Demands 50 Drugs Be Negotiated by 2028, Cutting Price Ceilings by Up To 25%

The Strengthening Medicare And Reducing Taxpayer Prices Act, or the SMART Prices Act, is essentially a turbocharger for Medicare’s drug price negotiation program. If passed, it significantly ramps up the government’s ability to demand lower prices on prescription drugs, and it does it faster than originally planned.

The Negotiation Scope Just Got Huge

Starting in 2028, the bill mandates a massive increase in the number of drugs Medicare must select for price negotiation. Instead of the current, unspecified target, the Secretary must now pick 50 negotiation-eligible drugs. That’s a huge jump in volume. Think of it like this: if the original plan was to dip a toe in the water, this bill throws the whole pool party. For taxpayers and Medicare beneficiaries, this means the potential savings on federal drug spending just got a lot bigger, potentially lowering costs across the board for a larger chunk of essential medications.

Hitting the Gas on Eligibility: 11 Years to 3 Years

This is where the rubber meets the road for pharmaceutical companies. The bill drastically shortens the time a drug manufacturer can sell a new medication at its full, non-negotiated price. Currently, certain types of drugs have up to 11 years on the market before they qualify for negotiation. The SMART Prices Act cuts that down to just 3 years for both major categories of qualifying single-source drugs. This is a game-changer. For a patient currently paying high prices for a newer drug, this acceleration could mean price relief arrives years earlier. However, manufacturers are likely to argue that shrinking this exclusivity window from 11 years to 3 years reduces their incentive to invest billions in developing the next generation of complex, life-saving drugs. When the payoff period gets shorter, the risk of R&D gets higher.

The Price Ceiling Adjustments: Who Pays What?

The bill also messes with the “Maximum Fair Price” (MFP) ceilings—the highest price Medicare is allowed to negotiate. For the drugs that have been on the market the longest (the lowest price tier), the ceiling drops from 40% of the original price down to 30%. For the middle tier, it drops sharply from 65% down to 55%.

Here’s the interesting twist: for the drugs in the highest price tier (those with the shortest time on the market), the ceiling actually moves slightly up, from 75% to 76%. While the overall trend is toward lower prices, the most expensive, newest drugs get a tiny bit more wiggle room. For a manufacturer, this means if your drug is in the middle tier, you’re facing a 10 percentage point cut in your maximum negotiated price starting in 2028. This is a clear signal that the legislation aims to drive down costs most aggressively on drugs that have already had a significant run on the market.

The Fine Print on Authority

One detail that might matter down the line is the removal of a specific clause that previously dictated how the drug selections were finalized. This small edit could grant the Secretary of Health and Human Services a bit more executive discretion in deciding which 50 drugs get the negotiation treatment. While it might streamline the process, it’s always worth noting when procedural guardrails are removed, as it gives the government more flexibility—for better or worse—in how they wield this powerful new pricing authority.