CMS Gains Permissive Exclusion Authority: Implications for Pharma and Medical Device Companies October 16, 2026 By Anne K. Walsh —

https://www.thefdalawblog.com/2026/10/cms-gains-permissive-exclusion-authority-implications-for-pharma-and-medical-device-companies/?utm_source=rss&utm_medium=rss&utm_campaign=cms-gains-permissive-exclusion-authority-implications-for-pharma-and-medical-device-companies On October 14, 2026, HHS Secretary Robert F. Kennedy, Jr. formally delegated to the CMS Administrator the Secretary’s permissive exclusion authority under Section 1128(b) of the Social Security Act, effective immediately. See Federal Register Notice here. Section 1128(b) allows the government to prohibit companies and individuals convicted of certain offenses, including violations of the Federal Food, Drug, and Cosmetic Act, from participating in federal healthcare programs that cover pharmaceutical drugs and medical devices. This new delegation of authority to CMS does not disturb the authority previously delegated to the HHS Office of Inspector General (HHS OIG), which has exercised this authority solo for almost four decades. Now, CMS and HHS OIG hold co-equal authority to permissively exclude companies from participating in Medicare and Medicaid programs.