The Trump administration’s proposal for the fourth cycle of the Biden-initiated Medicare drug price negotiations includes provisions that have drawn skepticism from pharmaceutical giants, opening a new path for legal challenges.

The Centers for Medicare & Medicaid Services last week released a proposed rule for implementing another round of drug price negotiations—the government’s first move to codify the program through rulemaking, rather than the guidance approach from previous cycles. The fourth round seeks to slash the costs for 20 drugs, to be selected later in the process, that are covered under Medicare. Those prices will take effect in 2029.

The plan includes policies to widen the selection of drugs for negotiations, which if finalized as proposed, would pave the way for additional product-specific lawsuits from pharmaceutical companies. Drugmakers have opposed the program since its inception under the Biden administration.

The rule could also raise issues for pharmacy benefit managers and insurance companies because the proposal states that any medication with a negotiated price has to be on Medicare Part D plans’ formularies, said Jonathan Swichar, chair of Duane Morris LLP’s pharmacy litigation group. Drugs being on a formulary, or the list of treatments that plans cover, would help ensure access to negotiated drug prices, according to the CMS.

“Companies and PBMs are likely going to say that they are in a much better position than CMS to determine to what extent certain products are appropriately on their Medicare Part D network formulary,” Swichar said.

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