CMS Update on Drugs Selected for Medicare Part D Price Negotiation
The Centers for Medicare and Medicaid Services (CMS) recently announced the next 15 brand drugs which have been selected for Medicare Part D price negotiation in Initial Price Applicability Year (IPAY) 2027. The selection of these drugs builds on the initial 10 selected for IPAY 2026 and brings to a total of 25 drugs which are subject to CMS price negotiations. All manufacturers of drugs selected for Part D price negotiation are required to negotiate a Maximum Fair Price (MFP) for that product with CMS or face significant penalties which include an excise tax and civil monetary penalties.
Therapeutic Class Impact of Medicare Part D Price Negotiation
The 25 drugs selected for price negotiation over IPAY years 2026 – 2027 span a number of therapeutic areas but are concentrated in diabetes, autoimmune, and cancer categories which account for 60% of the total drugs selected for price negotiation to date. As seen in Table 1 below, diabetes is particularly impacted with seven brand drugs expected to have government-negotiated prices by 2027 (Fiasp / NovoLog and Ozempic / Rybelsus / Wegovy are considered as one chemical entity each by CMS). It will be interesting to see if the broad exposure of this class to price controls impacts clinical innovation as it relates to the development of new diabetes drugs given the broad downward pressure on brand net prices.
Table 1. Brand Drugs Selected for Medicare Part D Price Negotiation

While manufacturers of MFP drugs selected for price negotiation will experience a direct impact on brand price, BluePath believes the indirect impact of MFP drugs on therapeutic class competitors will have a much larger impact on pricing and access across the biopharmaceutical industry. One way for manufacturers to think about price competition in an MFP class is to consider it as being similar to changes in utilization management (UM) which may occur when a brand drug loses patent protection. In the first round of price negotiations for IPAY 2026 drugs, the average discount across the 10 brands selected was 63%; this is approaching the 80 – 85% discount level often seen in generic price discounts below that of the innovator brand. Once a low-cost generic is available, payers may implement UM criteria to include step-therapy, preferred tier placement, and/or use of prior authorization which favors the generic product. Similar types of UM criteria may be employed by payers to develop preferred access for an MFP drug relative to comparator brands.
MFP drugs are by definition, market-leading drugs. This has the following implications for therapeutic class management:
- Market-leading brands may be able to incrementally build on existing market positions due to universal Medicare Part D access
- Payers may leverage non-MFP manufacturers in the same therapeutic class for further price concessions based on an MFP drug reference price point
- Alternatively, payers may no longer be tied to existing manufacturer contract restrictions for UM which offers new opportunity for competitors to MFP brands
- Payers may attempt to reference Medicare MFP pricing for leverage in their commercial line of business
CMS has issued guidance stating they will be evaluating Part D plan formularies for UM criteria which could disadvantage an MFP brand relative to other brand competitors. This and related UM policy dynamics will be important areas for manufacturers to monitor and engage with Medicare Part D plan sponsors as needed.
Next Steps in Medicare Part D Price Negotiations
The negotiation period for this group of 15 IPAY 2027 drugs is from February 28 – November 1, 2025. CMS is expected to announce the MFP price for the selected drugs by November 30, 2025. The MFP for these brands will be effective as of January 1, 2027.
Implications for Manufacturers
One important caveat to note is that the Trump administration will take over the Medicare negotiation process in the coming months. This article assumes the status quo with the Medicare Drug Price Negotiation Program based on the current state of the program. Details related to implementation of the Medicare drug negotiation process could be subject to change with the new administration.
Introduction of a brand drug with a CMS-negotiated MFP to a therapeutic class is expected to have a significant price and access impact on competitive brands. This may include, but not be limited to, the introduction of step-therapy, tier placement, and prior authorization criteria which are unfavorable to brand competing with an MFP drug. The introduction of a new lower-price MFP drug may also require new price concessions on non-negotiated drugs in the same therapeutic class in order to maintain existing levels of access.
The cumulative effect of Medicare price negotiations will be significant as CMS plans to add 15 Medicare Part B and D drugs in 2028 and 20 in 2029. Beyond this, CMS plans to select 20 Part B and D drugs for price negotiation in every applicability year after 2029. Thus, multiple other Part D therapeutic classes will be impacted by price negotiations over time as the program is implemented.
Manufacturers with potential therapeutic class exposure to MFP drug competition should consider how to incorporate the potential impact of price negotiation into current business planning efforts. The impact of price negotiations will be wide ranging with the potential to impact disparate internal workstreams such as clinical pipeline planning, evidence generation, and market access planning efforts. BluePath’s comprehensive expertise across these domains can help manufacturers assess and develop effective responses to Part D market developments.
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