August 17, 2026
The Honorable Mehmet Oz
Administrator, Centers for Medicare and Medicaid Services
U.S. Department of Health and Human Services
Attn: CMS-4215-P, P.O. Box 8013,
Baltimore, MD 21244
Re: CMS-4215-P – Medicare Drug Price Negotiation Program and Medicare
Prescription Drug Benefit Program
Dear Administrator Oz,
On behalf of the Pharmaceutical Industry Labor-Management Association (PILMA) –
a partnership between America’s leading biopharmaceutical companies and the
union workers who build and maintain their research and manufacturing facilities –
we appreciate the opportunity to submit comments on this proposed rule.
PILMA shares CMS’ goal of making prescription drugs more affordable for Medicare
beneficiaries and working families. However, we have serious concerns that several
provisions in this proposed rule risk undermining the domestic innovation ecosystem
and the high-quality union jobs that depend on it and urge the agency to proceed
with care and caution.
Since January 2025, biopharmaceutical companies have committed to investing
nearly $600 billion in domestic manufacturing and research operations – generating
tens of thousands of high-quality union construction and manufacturing jobs across
the countryi
. And in the five years before, independent research estimates the
pharmaceutical industry supported more than 65 million union labor hours and $2.6
billion in wages for skilled building trades workers who construct and maintain the
advanced facilities that power American innovation.ii
These investments depend on a public policy environment that enables companies
to confidently commit to long-term, capital-intensive projects. When confidence in
future returns erodes, construction timelines shift and the communities where our
union members work bear the consequences. We encourage CMS to take into
consideration the effects of the Medicare Drug Price Negotiation Program on future
innovation, domestic investment and jobs, as it finalizes and implements this rule.
Proposed Fixed Combination Drug Policy Creates Unintended Consequences
PILMA has significant concerns about the proposal to modify the definition of a
“Qualifying Single Source Drug” in the proposed rule.
Under this provision, certain subcutaneous formulations of existing biologic therapies
would be treated as the same drug as the original product for negotiation eligibility
purposes. These formulations require independent research, clinical development,
and regulatory review to bring to market, yet under this proposal they would besubject to the original product’s negotiation timeline rather than their own, which
would discourage the research and development of these kinds of products. This
matters for patients. Disincentivizing this category of innovation means fewer options
for the patients who need them most.
It also matters for labor. The development and commercialization of new drug
formulations drives investment in new and expanded manufacturing capacity – the
kind of capital-intensive construction projects that create good-paying work for
PILMA’s union pipefitters, electricians, and ironworkers. A regulatory environment
that narrows the return on formulation innovation is a regulatory environment that
puts those projects at risk. We urge CMS to narrow the scope of this provision,
establish clear and transparent operational criteria for its application, and assess its
effects on both patient access and domestic manufacturing investment before
finalizing this policy.
The Right Path to Affordability Runs Through Supply Chain Accountability
PILMA has long maintained that the most effective and durable path to drug
affordability lies in confronting the opaque, unaccountable intermediaries who extract
billions from the prescription drug supply chain while contributing nothing to
research, development, or patient care. Today, more than half of every dollar spent
on brand-name prescription drugs flows to insurers, pharmacy benefit managers,
and other middlemen.iii For union-employer administered Taft-Hartley health plans –
which cover approximately 12.7 million union workers and their familiesiv
– the costs
imposed by these practices are significant. PILMA’s research has shown that
distortions in the 340B Drug Pricing Program alone are driving up costs for these
plans by as much as $1 billion annually.v
We commend the Administration’s support for bipartisan legislation enacted earlier
this year de-linking PBM compensation in Medicare Part D from drug list prices.
These reforms directly target the incentive structures that drive up costs without
discouraging the investment that delivers new medicines. We urge CMS to
complement these reforms through its administrative actions and ensure that the
Negotiation Program does not create new opportunities for supply chain
intermediaries to extract additional value from negotiated Maximum Fair Prices.
Meaningful affordability for patients and workers will not be achieved by suppressing
the innovation that produces new medicines – it will be achieved by ensuring that the
savings from that innovation reach the people who need them, not the middlemen
who intercept them.
We stand ready to serve as a constructive partner in this conversation and are
grateful for the opportunity to contribute to this important rulemaking.
Respectfully submitted,
AJ StokesExecutive Director,
Pharmaceutical Industry Labor-Management Association
i We Work For Health. U.S. Biopharma Investment Watch. https://www.weworkforhealth.org/investinamerica
ii Institute for Construction Employment Research. An Analysis of Construction Spending in the Pharmaceutical &
Biotech Industry, 2019-2024. May 2025. https://unionjobs.pilma.org/wp-content/uploads/2025/06/2025-Jobs-Study-
Full-Report.pdf
iii Berkeley Research Group. The Pharmaceutical Supply Chain, 2013–2023. January 2025.
other-stakeholders/
iv International Foundation of Employee Benefit Plans, The Multiemployer Health Plan Landscape: A 15-Year Look
(2008-2022). December 2025. https://www.ifebp.org/detail-pages/resource/survey/the-multiemployer-health-plan-
landscape-a-15-year-look-2008-2022
v Pharmaceutical Industry Labor-Management Association. Evaluating the Role of 340B in Managing Healthcare
Costs for Taft-Hartley Plans. https://pilma.org/wp-content/uploads/2026/01/PILMA-Evaluating-the-Role-of-340B-in-
Managing-Healthcare-Costs-for-Taft-Hartley-Plans_1-29-26.pdf