The Centers for Medicare and Medicaid Services revealed justifications for the maximum fair prices negotiated with drug makers for the first 10 selected medications. These prices, set to take effect on Jan. 1, 2026, are on average 22% lower than the net prices in 2023. The negotiation process involved offers and counteroffers between CMS and manufacturers, with CMS posting explanations for each drug’s price determination.
CMS determined initial offers by identifying therapeutic alternatives and pricing information for competitors. The agency then adjusted prices based on clinical benefits and safety profiles, considering data from manufacturers’ counteroffers. CMS prioritized direct comparative evidence, evaluating clinical outcomes and patient experiences to assess effectiveness.
Notably, the negotiated prices for Eliquis and Xarelto, both anticoagulants, differed despite similar list prices. The MFP for Imbruvica, a cancer medication, was significantly reduced due to the ceiling price stipulated in the IRA law. While the rationales provided insight into CMS’s negotiation process, they did not detail how specific data influenced MFP adjustments.
Overall, the rationales shed light on the value elements considered by CMS in the negotiation of maximum fair prices for Medicare drugs. The explanations also allow for agency flexibility to shape the program in the future, regardless of the administration in charge.
Recently, the CMS under the Trump administration stated its dedication to incorporating lessons learned from the program and exploring ways to increase transparency in the Negotiation Program. The specifics of what “greater transparency” entails and whether new negotiation methods, like benchmarking international prices, will be explored, are still uncertain.
