Our Take
The rule closes a real gap in price protection timing, but the practical impact depends on whether manufacturers have already locked in price gains during the IV window.
Why it matters
Keytruda and Opdivo are among the highest-cost oncology drugs in the Medicare system. The timing of this rule change signals Medicare is aware of formulation-switching as a pricing strategy and is willing to move the goalposts mid-product lifecycle.
Do this week
Payers: audit your current contracts for Keytruda and Opdivo subcutaneous formulations before 2029 to identify whether locked-in pricing already reflects the IV-to-injection transition.
Medicare proposes closing a formulation loophole
A proposed federal rule for 2029 would eliminate price protection for drugs transitioning from intravenous (IV) to subcutaneous (under-the-skin) administration. The change specifically targets medicines like Merck's Keytruda and Bristol Myers Squibb's Opdivo, both widely used in oncology and among Medicare's highest drug costs.
Under current Medicare drug price negotiation rules, medicines gain temporary price protection after their formulation changes. The proposed rule would close this window, allowing Medicare to negotiate prices on newly formulated versions without the same protections that shield recently-negotiated drugs from repricing. The rule would apply starting in 2029, per BioPharma Dive.
This is not a ban on subcutaneous formulations. It is a clarification that switching delivery method does not restart the price protection clock. Manufacturers retain the right to offer both IV and injection versions; they would simply lose the assumption of protected pricing on the new form.
Manufacturers use formulation shifts to extend pricing windows
The IV-to-injection transition is a genuine clinical improvement for many patients. Subcutaneous dosing reduces infusion center visits, improves convenience, and can enable home administration. These benefits are real and material to patient experience.
But formulation changes also function as a pricing strategy. By introducing a new delivery method, manufacturers create a product that technically differs from the original, which can reset or extend price protection periods under some regulatory frameworks. Medicare has observed this pattern and is moving to prevent it from extending negotiation delays on its largest drug spending categories.
Keytruda and Opdivo are anchor drugs in their respective therapeutic categories. Any change to their pricing dynamics affects downstream negotiation patterns across immuno-oncology and shifts cost exposure across the healthcare system. The 2029 effective date gives manufacturers nearly five years to adjust manufacturing and pricing strategies.
What payers and manufacturers should do
For payers, the rule change means formulation switches no longer buy time. Audit existing contracts now to understand whether Keytruda or Opdivo subcutaneous pricing was already negotiated to account for potential future repricing, or whether your contract assumes protection through the normal negotiation cycle. If the latter, expect renegotiation pressure starting in 2029.
For manufacturers, the rule reduces the financial incentive to delay subcutaneous rollout or to price the new formulation as a premium product during the protected window. The economics of switching delivery method will depend more purely on patient adoption and clinical benefit, not on regulatory arbitrage.
For patient advocates, the rule does not prevent subcutaneous options from entering the market. It simply prevents manufacturers from using formulation changes as a way to extend periods during which Medicare cannot negotiate. The clinical value of subcutaneous Keytruda and Opdivo stands independent of the pricing rule.