Update on CMS 2026 Physician Fee Schedule Final Rule: Key Takeaways for Pharma

As we explained here, the PFS final rule sets forth significant policy and payment changes that impact “buy and bill” providers, drug manufacturers, and other stakeholders in the pharmaceutical supply chain.

Among other changes, the rule requires that manufacturers provide sufficient evidence in the form of a customer “certification or warranty” letter that a fee is not passed on in whole or in part to a client or customer of an entity, whether or not the entity takes title to the drug in order to treat a customer fee as bona fide. Manufacturers are required to obtain these letters from customers for any new customer contracts and renewals effective January 1, 2026.

The rule further requires that, effective January 1, 2026, reasonable assumptions for the calculation of the manufacturer’s ASP must be included as part of the quarterly ASP data submissions to CMS, including documentation of the methodology used to determine fair market value (FMV) for current, new, and renewed customer contracts with service fees deemed BFSFs.

As promised in the rule, CMS has now published templates for manufacturers to utilize when documenting ASP reasonable assumptions and the BFSF certification/warranty letter. These templates are available for download here as part of the package for Form CMS-10110, which additionally includes a statement to support CMS’ request to the Office of Management and Budget for the use of these forms as part of the new submission requirements.

BFSF Certification Form

The BFSF Certification Form includes sections to record the following:

• All drug and manufacturer information associated with the BFSFs, including drug name(s), national drug code(s), manufacturer name, and manufacturer address.
• Information regarding the recipient of the BFSFs, including name and title of the certifying individual, organization or entity name, organization or entity address, bona fide service, and BFSF amount.
  • For the BFSF amount, CMS states that, if the fee varies based on certain metrics, manufacturers should describe the conditions of the fee and how it is determined.
• Sign off from both the manufacturer and fee recipient on the “Certification Statement,” which provides, “I certify that the fee is not passed on in whole or in part to an affiliate, client, or customer of an entity.”

ASP Reasonable Assumptions Form

The CMS template for documenting ASP reasonable assumptions includes sections to record the following:

• BFSFs: An overview of contractual arrangements that the submitting manufacturer has with entities for which it pays a bona fide service fee(s) as well as the FMV analysis for service arrangements each time an arrangement is issued or renewed.
• Bundled Sales: An overview of bundled sale arrangements and the discount reallocation for each arrangement.
• Price Concessions and Discounts: A list and overview of price concessions and discounts (e.g., lagged, non-lagged, stacked, prompt pay) for products or transactions.
• Reporting of Products with Zero, Negative, or False Positive ASPs: Confirmation of how the submitting manufacturer will report products with zero, negative, or false positive ASPs.
• Sales Excluded from Best Price: Confirmation of how the submitting manufacturer will report sales excluded from Medicaid Best Price.
• Time Value of Money: Confirmation of how the submitting manufacturer factors the time value of money in the ASP calculation.
• Free Goods Not Contingent on a Purchase Requirement: A review of any free goods not contingent on a purchase requirement, including but not limited to coupons, copay assistance programs, vouchers and free goods, and patient assistance programs.
• Value-Based Purchasing Arrangements: Confirmation of how the submitting manufacturer accounts for any value-based purchasing arrangements in the ASP calculation.
• Sales to 340B Covered Entities: Confirmation of how the submitting manufacturer’s sales to 340B covered entities are considered in the ASP calculation.
• Returned Goods: Confirmation of how returned goods will be treated in the ASP calculation.
• Billing Corrections: Confirmation of how the submitting manufacturer processes transactional issues that may require a credit or rebill.
• Other Reasonable Assumptions: Any additional reasonable assumptions to report other assumptions. This form is optional.

In its supporting statement, CMS discusses the background, justification, and burden to both industry and the federal government regarding the use of these new forms.

The 2026 final PFS rule and newly issued templates continue to reflect CMS’ focus on drug pricing transparency, compliance, and cost containment. ArentFox Schiff attorneys are available to help you analyze the impact of these changes and ensure compliance with new requirements. Please contact us for further guidance on the implications of the PFS final rule and newly published templates.