The US Pharmacopeia Convention (USP) is a nonprofit organization that disseminates public compendial quality standards for medicines and develops two drug classification systems: the Medicare Model Guidelines (MMG) for Part D plans and the Drug Classification (DC) for non-Part D plans. The classification systems group eligible drugs into categories and classes that health plans can use in their formulary development process. While there are limited formal requirements regarding how health plans interact with the USP’s classification systems, the USP’s decisions on how drugs are grouped within categories and classes can have a downstream impact on plan formularies, coverage requirements, and patient access.

The USP Releases Two Classification Sets to Guide Formulary Development

The Medicare Prescription Drug Improvement and Modernization Act of 2003 requires the USP, in collaboration with stakeholders, to create a list of categories and classes for Medicare Part D drug formulary development. The Medicare Prescription Drug Benefit Manual enables Part D plans to align their formulary structure with the Medicare Managed Care Manual (MMG), without penalties for non-compliance. Part D plans must adhere to specific coverage requirements, however, such as the “two drugs per class” rule and six protected classes,¹ making USP’s organization of drugs in the MMG crucial for patient access.

The USP updates the MMG every three years, with the latest version (v9.0) finalized in September 2023 for plan years 2025–2026. Additionally, the USP MMG influences prescription drug coverage in commercial plans by ensuring that health plans cover either the same number of drugs in each USP category as specified in a state’s Essential Health Benefits (EHB) benchmark plan or at least one drug per class.

At the request of health plans with other books of business (i.e., non-Medicare Part D plans), the USP launched the first version of the DC in 2019. The DC includes medications beyond those specifically covered under the Medicare Part D benefit—such as drugs used to treat symptomatic relief of cough and cold and to promote fertility—and is more comprehensive than the MMG.² Unlike the three-year update cycle of the MMG, the DC is updated annually, which offers stakeholders more opportunities to engage the USP.

The USP DC 2025 Draft

On October 1, the USP released the DC 2025 Draft. The draft includes the USP’s suggested classification for drugs approved by the Food and Drug Administration (FDA) from November 2023 to July 2024. The USP will also consider drugs approved between August and October 2024 for the final publication. One clear differentiation from MMG is that DC offers a third level of classification known as pharmacotherapeutic groups (PGs), which the USP defines as an attribute of a drug, providing additional informational groupings on drugs based on therapeutic use or pharmacology. ​

Pending public comment and final approval, the USP DC 2025 Draft proposes the following changes. Drugs approved after October 31 will be addressed in the next version.

New Classes:

• Blood Products and Modifiers: Added “Erythropoiesis Promoters”

New Pharmacotherapeutic Groups:

• Antineoplastics: Added “Anti-CD3/DLL3”
• Blood Products and Modifiers: 7 new PGs, including various Erythropoiesis Promoters and Blood Component Deficiency/Replacement groups
• New PGs in Cardiovascular Agents, Immunological Agents, Respiratory Tract/Pulmonary Agents, and Sleep Disorder Agents

New Drugs:

• Total: 90 new FDA-approved drugs across 22 classes
• Notable additions include drugs in Antibacterials, Antidementia, Antineoplastics, Blood Products, Cardiovascular Agents, and Immunological Agents

Figure 1. The USP MMG and DC Timeline

Note: Based on communication with the USP, work on MMG v10.0 will likely begin in 2026, with final timelines contingent on agreements with CMS. MMG v10.0 is anticipated to be released in the fall of 2026, and USP expects v10.0 will be effective from PY 2027-2029. However, given that formularies must be submitted to CMS by the first Monday in June for the subsequent plan year, Avalere expects MMG v9.0 to be effective through PY 2027 and MMG v10.0 to be effective from PY 2028 to 2030.

How to Engage

The USP invited stakeholders, including life sciences companies, to engage and offer feedback on the proposed updates. These periodic revisions are intended to account for the market entrance of newly approved drugs, drugs with newly approved indications, and reclassification of existing drugs as needed. Through October 31, 2024, stakeholders have two opportunities to offer feedback on the proposed 2025 the USP DC revisions:

• One-on-One Meetings with the USP: Stakeholders can email the USP to request a 30-minute meeting to review the USP’s proposed changes.
• Comment Submission: Stakeholders can submit written comments via an online form provided by the USP, highlighting changes they believe the USP should consider before finalizing the DC.

When preparing to engage the USP with feedback on the proposed updates to the classification systems, stakeholders should be prepared to offer alternative placements, understanding the benefits and tradeoffs. Avalere can help life sciences companies and other stakeholders organize proactively in preparation for engagement with the USP.

For planning engagement with the USP DC 2025 Draft, and to learn more about how Avalere can support you, connect with us.

¹ When Congress created the Medicare Part D program, it required plan formularies to include at least two drugs per class to ensure that beneficiaries would have access to treatments based on their needs. The CMS identified categories and classes of clinical concern, commonly known as the six protected classes, and required Part D plans to cover “all or substantially all drugs” within each class. These protected classes include anticonvulsants, antidepressants, antineoplastics, antipsychotics, antiretrovirals, and immunosuppressants.

² In the proposed NBPP for PY 2025, CMS requested feedback on the potential transition from the USP MMG to the USP DC system for classifying prescription drugs covered as EHB. Previously, CMS sought input on alternative systems, including the American Hospital Formulary Service (AHFS) and the USP DC.