On August 15, 2024, the Centers for Medicare and Medicaid Services (CMS) announced the Maximum Fair Prices (MFPs) for the first 10 drugs selected for the “Medicare Drug Price Negotiation Program” under the Inflation Reduction Act. Manufacturers of the first 10 Selected Drugs must provide access to the MFP for Medicare Part D patients starting with Initial Price Applicability Year (IPAY) 2026. CMS released the following documents:

Press Release
Negotiated Prices for IPAY 2026 Fact Sheet
MFP File

CMS released the MFPs in the form of:

a “Single MFP” for a 30-day equivalent supply, and
the NDC-9 per unit MFP and NDC-11 per package MFP

CMS used a “Single MFP” as the basis of negotiations with manufacturers. CMS calculated the single MFP as “the cost of the selected drug per 30-day equivalent supply (rather than per unit – such as tablet, capsule, injection – or per volume or weight-based metric), weighted across dosage forms and strengths.” CMS published Single MFPs for the 10 Selected Drugs in the order of discount off of list price – with Januvia having the highest discount (79 percent) and Imbruvica the lowest (38 percent), detailed in Table I.

Table I: CMS Publication of Single MFPs for a 30-day Equivalent Supply

CMS also calculated the MFPs at the per unit (e.g., tablet) level for each NDC-9 and the per package level for each NCD-11. Table II provides an example NDC-11 for each Selected Drug and compares the drug’s 30-day supply equivalent WAC to the MFP for that specific NDC-11. Note that ADVI used CY 2024 list prices below whereas CMS published CY 2023 list prices. See the MFP File for a listing of the MFPs associated with NDC-9s and NDC-11s for each Selected Drug.

Table II: Example per package MFPs

Key takeaways:

The administration estimates the MFPs for the first round of negotiation will save the Medicare program $6 billion and will save Medicare beneficiaries $1.5 billion in 2026.
CMS messaging touts the success of the negotiation program noting “Negotiating for Lower Drug Prices Works, Saves Billions” and the White House notes “President Biden and Vice President Harris took on Big Pharma and won.”
CMS provides an example of Stelara OOP costs dropping from $3,400 to $1,100 for a beneficiary with 25 percent coinsurance.
MFPs were presented as savings off WAC, not net price. This comparison likely overstates the overall price reduction, particularly for highly rebated products.
CMS published MFP discounts as compared to 2023 list prices. When compared to 2024 list prices, savings were comparable with the exception of Novolog/Fiasp. Due to list price cuts, the negotiated price of Novolog/Fiasp only reflects a 4 percent discount off its current price vs. 76 percent when compared to 2023 list price.
As expected, CMS did not publish the drugs’ MFP ceiling prices, likely due to confidentiality requirements (SSA 1193(c)).
CMS briefly described the negotiation process, sharing that:
For ten of ten drugs, CMS adjusted its initial offer upward
For five of the negotiated drugs, an MFP agreement was reached during negotiation discussions
For our of these five, CMS accepted a revised counteroffer
For the other five drugs, manufacturers accepted the written final offers sent by CMS

Notable quotes

“The negotiations were comprehensive. They were intense. It took both sides to reach a good deal.” – HHS Secretary Xavier Becerra
“We are not stopping here. Additional prescription drugs will be selected each year as part of our Medicare drug price negotiation program.” – Vice President Kamala Harris
“Throughout the process, we remained true to our commitment to be thoughtful and transparent, meeting publicly with patients, providers, health plans, pharmacies, drug companies and others to help inform the process. We will continue to do so for future cycles. Our team is actively working on the next cycle of negotiations where we will combine what we have learned from this first cycle and apply it in negotiating prices for the next round of up to 15 selected drugs.” – CMS Deputy Administrator and Director of the Center for Medicare Meena Seshamani

Next steps:

March 1, 2025 (or earlier): CMS is required to provide a rationale of the MFPs by March 1, 2025 (SSA 1195(a)(2)) but stated in the IPAY 2026 Final Guidance that the agency “will strive to release the public explanation of the MFP as soon as practicable.”
It is unclear how much information will be included in the MFP explanation. In the IPAY 2026 Final Guidance CMS noted that it will focus on the factors that had “the greatest impact in determining the MFP” without sharing any proprietary information.
January 1, 2026: MFPs go into effect for first 10 drugs selected for negotiation.

ADVI will continue monitoring developments and the next steps. This is a delayed release. ADVI Instant content is distributed in real-time for retainer clients. Get in touch to learn more about how we can support your commercialization, market access, and policy needs.