On August 29, the Centers for Medicare and Medicaid Services (CMS) released the long-awaited list of 10 top-spending Part D drugs that will be subject to a negotiated maximum fair price (MFP), applicable in 2026 (see Figure 1).

“CMS has entered the global conversation on establishing market prices. With the calculation of the MFP, the agency will reduce drug expenditures for Medicare,” said Lance Grady, Executive Vice President of Life Sciences Strategy & Growth. “For selected drugs and corresponding therapeutic areas, stakeholders are asking, ‘How does this impact me?’ CMS will answer several questions through negotiation—not only what the Medicare savings are but also ultimately how patients access the drug at the new price through the Part D benefit. That level of understanding is vital to the negotiation that will unfold.”

Stakeholder Engagement Opportunities

CMS also announced that it will hold 90-minute public listening session for each drug October 30–November 15 (speakers must register September 1–October 2). The sessions are open to patients, beneficiaries, caregivers, consumer and patient organizations, and other stakeholders. CMS will also accept written statements. Additionally, stakeholders may submit responses to the Negotiation Data Elements Information Collection Request prior to October 2.

Stakeholders should consider their strategy for CMS engagement vis-à-vis data submission, listening session participation, and other venues. Given that the affected therapeutic areas include some of the highest burden conditions in the US, these could be opportunities to highlight both clinical and non-clinical benefits that negotiated medicines offer to patients, caregivers, and society.

“The listening sessions offer a key engagement point for patients, caregivers, and other stakeholders, but opportunities are limited,” said Kelsey Lang, Principal. “Patient advocates in particular have voiced their desire for an active role in ensuring that patient and caregiver experiences and access concerns are prominently featured in CMS’s process.”

Implications for Therapeutic Areas and Competitive Dynamics

Drugs selected for negotiation represent therapeutic areas including cardiovascular disease, diabetes, and chronic kidney disease. Additionally, highly competitive classes such as rapid-acting insulin and immunologics are included on the selected drug list. Manufacturers of non-selected products in these classes should consider implications for future Part D bids and their own products’ future negotiation processes.

Furthermore, many of the selected products are direct competitors or products to which CMS will look when determining comparative effectiveness between each selected product and its therapeutic alternative. Manufacturers will have to consider how to balance competitive interests with making the best possible case for the innovative value of the class.

“Manufacturers will need to weigh how clinical and financial factors are framed relative to generic and branded competitors,” said Mark Gooding, Managing Director. “In many instances, there may be an ‘all ships rise’ approach to demonstrating the value of a class versus head-to-head competition against other branded agents. For therapeutic areas where not all competitors will be negotiated, this also introduces interesting market dynamics not only in 2026 but perhaps also in 2025.”

Many of the products on the list already offer significant price concessions and rebates to Part D plans, given the existing competitive dynamics. “The net Part D price for many of the selected drugs is already below the ceiling formula outlined in the statute. It is unclear how much CMS negotiation will succeed in driving additional savings without causing market disruption,” said Milena Sullivan, Managing Director. “All eyes will be on how this affects the commercial market and whether it turns Part D net price into a de facto reference price in the therapeutic area.”

Considerations for Generic/Biosimilar Entry

Manufacturers of drugs negotiated for Initial Price Applicability Year 2026 and future years should assess when generics and biosimilars are likely to enter the market. Even if a drug is selected for price negotiation, the timeline of generic entry may make a selected product no longer eligible for negotiation or shorten the effective period of its MFP.

“The list included a few drugs we didn’t expect, but the biggest surprise is how many of the selected drugs are nearing the end of their lifecycle and may see generic or biosimilar competition before the MFP is effective,” said Margaret Scott, Principal.

Looking Beyond the First Year of Medicare Negotiation

The list of products targeted for negotiation in the first year will impact the potential timing of selection for other high-spending drugs, so manufacturers should continue to analyze qualitative and quantitative factors that could impact the negotiation risks to their portfolio and pipeline.

Additionally, manufacturers that expect  portfolio assets to be selected in upcoming price applicability years are at an important juncture to assess their evidence generation strategy to optimize their value dossier for future negotiation years.

Other products in the class should also weigh the merits of evidence submissions. “Given potential competitive dynamics, competitors of the selected drugs need to consider whether to submit evidence to CMS supporting the overall value of the drug class,” said Michael Ciarametaro, Principal.

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Avalere’s experts in Medicare, drug pricing, and IRA implementation are helping healthcare stakeholders to anticipate, understand, and respond to unfolding program details. Avalere is prepared to support stakeholders throughout the drug price negotiation process with a variety of offerings. To learn how we can help you assess the potential impact on your business and identify outstanding questions, connect with us.