A proposed federal rule set to take effect in 2029 aims to close a regulatory 'loophole' that currently shields medicines switching from intravenous to subcutaneous administration from Medicare price negotiation. The rule directly targets oncology heavyweights Keytruda (pembrolizumab) and Opdivo (nivolumab), which have developed under-the-skin formulations.
Under current law, drugs that change their route of administration—such as from IV to subcutaneous—can be classified as new products, delaying their inclusion in Medicare's price negotiation program. The new rule would close that gap, allowing the government to negotiate prices on these reformulated medicines earlier than previously possible.
The rule's timeline targets 2029, giving manufacturers time to prepare for potential price caps. Keytruda, made by Merck, and Opdivo, from Bristol Myers Squibb, are among the best-selling cancer drugs globally, with combined annual sales exceeding $30 billion. Subcutaneous versions offer convenience for patients and clinics but could face significant price reductions under Medicare negotiation.
The pharmaceutical industry has pushed back, arguing that such rule changes could stifle innovation in drug delivery improvements. Trade groups warn that closing the loophole may disincentivize companies from developing patient-friendly formulations that reduce infusion times and healthcare resource use.
A counterargument from patient advocates suggests that these delivery method changes should not shield drugs from price negotiation, as they still rely on the same active ingredient and often cost similar amounts. The policy debate highlights tension between fostering convenience innovations and controlling healthcare spending.