The Inflation Reduction Act of 2022 (IRA) established the Medicare Drug Price Negotiation Program to empower Medicare to negotiate prices for select high-cost prescription drugs in an effort to lower  costs for both the Medicare program and its beneficiaries.  Prior to this law, Medicare was prohibited from negotiating drug prices so the IRA marked a historic policy change after years of debate¹. Under the IRA, the Health and Human Services (HHS) Secretary (through the Centers for Medicare & Medicaid Services, CMS) is required to negotiate “maximum fair prices” (MFPs) for certain Medicare Part D and B drugs starting in 2026 and 2028, respectively¹ The negotiated price or MFP becomes the limit Medicare will pay for those drugs when covering beneficiaries – effectively setting a federally negotiated ceiling price. 

The law specifies a gradual ramp-up of negotiated drugs, adding more to the list each year. CMS negotiated prices for 10 Part D drugs that will take effect in 2026, an additional 15 Part D drugs will be added for 2027, another 15 drugs in 2028 (now including Part B drugs from there on), and 20 additional drugs in 2029 and each year thereafter². ³. These numbers are also maximum targets as the IRA allows fewer drugs for negotiation in a given year if there are not enough products meeting the eligibility criteria³.  

In May 2025, CMS released draft guidance for the 2028 negotiation cycle (Initial Price Applicability Year 2028), which for the first time outlined how Part B drugs would be handled in the negotiation program⁴. According to the CMS fact sheet within the draft guidance, the agency is formulating the process to identify eligible Part B drugs and calculate appropriate price ceilings for them¹. The same fundamental criteria seen in Part D will apply; Part B drugs must be single-source, high-expenditure, and have more than 11 years on the market for biologics (7 years for any small-molecule Part B drugs, though most Part B drugs are biologics or injectables). CMS will begin including Part B drugs in the combined top fifty expenditure ranking from which selections are made³. 

The inclusion of Part B drugs in Medicare price negotiations has direct implications for providers, manufacturers, patients, and the broader market. 

Provider margins may shrink under MFP-based reimbursement

Currently, Medicare typically reimburses providers at ASP + 6%. If the MFP set by CMS is below the prevailing ASP for a drug, it will reduce reimbursement levels for providers that may leave them underwater. Avalere estimates that add-on payments could decrease by over $25 billion across the first ten negotiated Part B drugs alone⁵. The financial impact is likely to be most heavily felt by practices with limited negotiating power or cash flow flexibility, such as independent infusion centers or rural oncology groups. 

Operational complexity will increase

Providers may face challenges in ensuring they acquire and dispense MFP-priced drugs only for Medicare patients while maintaining commercially priced inventory for their remaining patients. CMS has proposed a Medicare Transaction Facilitator (MTF) to support reconciliation and payment flows, but until final guidance is issued, manufacturers may need to issue upfront discounts or post-sale refunds³. This added burden may drive some providers to limit the use of, or stop stocking completely, MFP-eligible products.

Pricing pressure will be more pronounced for Part B than Part D products

Unlike Part D therapies that are already subject to manufacturer rebates and PBM negotiations, many Part B drugs, especially physician-administered biologics, face minimal existing discounts. As a result, the delta between current net prices and MFP ceilings will be greater. Projected MFPs based on statutory discount formulas (e.g., 65% of the drug’s NFAMP for drugs on market 12–16 years) are materially lower than ASPs for several high-cost Part B therapies. 

Future selections are expected to include lower-spend but high-impact drugs

IntegriChain’s analysis identified several drugs which, while currently ineligible for selection due to a Medicare spend of <$200M, are projected to surpass the $200M Medicare spend threshold by 2034. This means manufacturers with these products which continue to be considered “under the radar” for negotiation, could suddenly find themselves exposed in later cycles. There’s the added possibility of the threshold shifting further down to incorporate more drugs into the selection criteria as the attention shifts more towards the mid and low-spend drugs. This trend reflects a broader shift: as the most obvious high-spend, long-exclusivity drugs are selected in early rounds, CMS will likely turn to mid-tier brands with growing Medicare exposure and no generic or biosimilar competition. These single-source products, even if not blockbuster in size, become stronger candidates as the pool of large-market exclusivity drugs continues to narrow.

Patients may benefit on cost, but not necessarily on access

With an average Part B coinsurance of 20% of the drug cost, an MFP would reduce out-of-pocket obligations. However, if providers scale back inventory of MFP-eligible drugs due to financial risk or reimbursement lag, patient access, particularly in community settings, could become more limited.⁶ 

The Part B expansion of the negotiation program materially changes the calculus for drug manufacturers and providers. Modeling long-term exposure and assessing operational readiness will be critical as CMS finalizes MFP implementation protocols for 2028 and beyond. If you have any questions about what these changes may mean for your product reach out to your IntegriChain Advisory contact or Account Representative. 

Resources

• FAQs About the Inflation Reduction Act’s Medicare Drug Price Negotiation Program
• HHS Announces 15 Additional Drugs Selected for Medicare Drug Price Negotiations in Continued Effort to Lower Prescription Drug Costs for Seniors
• CMS Draft Guidance on MFP for IPAY 2028
• CMS Issues Draft Guidance on IRA 2028 Drug Price Negotiation Program
• Navigating Medicare Part B Negotiation and Its Unintended Consequences

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Part D Manufacturer Rebates are nothing new to the industry. However, the program received a major facelift in 2025 following the implementation of Part D specific provisions in the Inflation Reduction Act (IRA). Understanding how CMS operationalized the IRA guidance is essential to improving and maintaining accurate accruals, verifying invoiced amounts, and mitigating compliance risks. The key findings and considerations IntegriChain has identified from the first invoice cycle are summarized below:  

How is the MDP invoice different from the Coverage Gap Invoice?

Aside from the new name of the program “Manufacturer Discount Program (MDP)” overlapping with an existing federal program portal, the new Initial and Catastrophic coverage phases (and removal of the Donut Hole) precipitated a handful of new invoice fields: 

1. Designate manufacturer liability below and above the patient out-of-pocket (OOP) limit of $2,000.  
   • The OOP limit is built up based on True OOP costs (TrOOP), which is a term used to distinguish between costs-on behalf of the patient-that actually count towards their $2,000 limit and those that don’t.  
2. Low-income-subsidy (LIS) amount 
3. Total Gross Covered drug costs 

What can you dispute?

Manufacturers have limited options when disputing MDP invoice claims. So far, CMS is only evaluating disputes related to:   

1. Improper categorization of manufacturer and/or their drug including misapplied and/or absent phase-in treatment (i.e. Specified or Specified Small manufacturer discount reductions) for all or LIS only patients 
2. Mathematical errors such as improper billed amounts based on direct multiplication of amounts above/below the TrOOP and their respective 1%, 10%, and/or 20% 

What are manufacturers finding the most valuable?

As we reviewed Q1 2025 MDP invoices alongside manufacturers, IntegriChain received a number of questions related to what we can and cannot determine from the invoices. One caveat is that CMS is not providing claim level detail (CLD) to manufacturers for invoice verification. However, below are the insights we found most useful, and the associated concerns/questions they helped to answer. 

1. For Specified Manufacturers (i.e. Phase-in status only applies to LIS beneficiaries), we are able to consistently determine the LIS/Non-LIS mix presented in the invoices. 
   • Manufacturers with the Specified designation are highly dependent on accurately forecasting their LIS patient population, especially those with high-cost therapeutics. As an illustrative example, a $20k per month drug for an LIS patient would incur 1% rebate from the manufacturer, regardless of coverage phase (i.e. ICP/Catastrophic), whereas a non-LIS patient would result in the manufacturer paying 10% of costs below the $2k OOP limit and 20% above. 
   • Leveraging the LIS subsidy column is essential to determining the mix and involved additional steps and review, whereas for Specified Small Manufacturers or those without Phase-in status, the invoices do not provide enough information to identify the LIS/Non-LIS patient mix. 
2. The elusive Negotiated Rate 
   • MDP rebates are based on the Negotiated Rate: the price paid for the drug-at the point of dispense-as determined by the PBM and Pharmacy. Many manufacturers have relied on WAC based accrual estimates. In some cases, the WAC assumption did not result in significant variance, whereas if the Negotiated Rate was significantly different than WAC, the forecasted accruals could be significantly impacted. 
   • Manufacturers should consider leveraging the gross drug cost, cost below and above the OOP limit, and the per unit dispense to identify the Negotiated Rate as basis for its accrual estimation. 

Summary

Considering all the above items, a host of new insights or complications may arise with the next cycle of invoices. Any significant changes to accrual estimates should be weighed against robust insights and analytics which IntegriChain is happy to support. As we support a large volume of clients across all facets of the IRA, we offer impact and strategy analytics on both program specific and holistic IRA legislation like drug price negotiations, Part D forecasting and strategy, inflation rebates and more.