On August 15, the Centers for Medicare & Medicaid Services (CMS) released the maximum fair prices (MFPs) for the first 10 selected drugs under the Inflation Reduction Act (IRA)’s Medicare Drug Price Negotiation Program. These prices will go into effect January 1, 2026.

While these new MFPs apply to the 10 selected drugs, they may also impact competitive dynamics between these drugs and their therapeutic alternatives. Medicare Part D plans may change formulary strategies based on the MFP, leading to effects for beneficiaries that are using selected drugs and therapeutic alternatives that have not been selected.

To assess the potential number of Medicare beneficiaries who may see impacts of MFPs in the market, Avalere identified therapeutic alternatives of the 10 selected drugs for initial price applicability year (IPAY) 2026. Using the most recent CMS dashboard data, Avalere then estimated the number of beneficiaries by therapeutic area that used one of the 10 selected drugs or a therapeutic alternative in 2022 (Table 1).

*Estimated Part B beneficiaries includes fee-for-service (FFS) beneficiaries from the CMS Part B dashboard and estimated Medicare Advantage (MA) enrollees based on the relative enrollment in FFS vs. MA. The number of beneficiaries reported does not represent a unique count of enrollees as beneficiaries may take multiple products within and across therapeutic areas.

Methodology

Avalere used internal clinical expertise to identify therapeutic alternative products for the 10 selected drugs for IPAY 2026. Avalere then used the 2022 CMS Part D and Part B spending dashboards (the most recent year of available data) to identify the number of beneficiaries taking each identified selected drug and therapeutic alternative. Because the Part B dashboard only includes spending and utilization from fee-for-service (FFS) Medicare, Avalere applied a ratio based on Medicare Advantage (MA) vs. FFS enrollment in 2022 to estimate the number of enrollees taking a selected drug or a therapeutic alternative.