Georgia Medicare Drug Price Negotiation: First 10 Drugs and Savings (2026)

By Brevy Care Team · Last verified May 13, 2026

For nearly two decades after Medicare Part D launched in 2006, the federal government was prohibited by statute from negotiating drug prices with pharmaceutical manufacturers. The "non-interference clause" at Section 1860D-11(i) of the Social Security Act, enacted as part of the Medicare Modernization Act of 2003 (MMA, Public Law 108-173), explicitly forbade HHS from intervening in negotiations between drug manufacturers, pharmacies, and Part D plans. The result was a US drug pricing environment in which Medicare frequently paid double or triple what other developed nations paid for the same medications.

The Inflation Reduction Act of 2022 (IRA, Public Law 117-169) at Section 11401 fundamentally changed this framework. For the first time in Medicare's history, Congress authorized HHS to negotiate prices for high-spend Part D drugs through a new Medicare Drug Price Negotiation Program codified at Section 1191 et seq. of the Social Security Act (42 USC 1320f). The program selects "negotiation-eligible drugs" from the top 50 Part D drugs by spending, applies a statutory methodology to compute Maximum Fair Prices (MFPs), and requires participating manufacturers to sell at MFP to Medicare beneficiaries. The first 10 MFPs took effect January 1, 2026, for Eliquis, Jardiance, Xarelto, Januvia, Farxiga, Entresto, Enbrel, Imbruvica, Stelara, and Fiasp/NovoLog. List prices dropped by 38% to 79% across the 10 drugs.

This guide explains the complete federal framework for the Medicare Drug Price Negotiation Program, walks through the selection criteria and negotiation process, details Maximum Fair Price calculations and how MFPs flow operationally through Part D plans to Georgia pharmacies, covers the constitutional litigation filed by major manufacturers and the courts' rulings, examines how MFPs interact with the $2,000 out-of-pocket cap under IRA Section 11201, projects the future negotiation schedule through 2029, and provides six worked examples showing concrete dollar savings for typical Georgia Medicare beneficiaries on the 10 negotiated drugs.

::: hero Georgia Medicare Drug Price Negotiation at a glance

• Federal authority: Section 11401 of the Inflation Reduction Act 2022 (Public Law 117-169) created the Medicare Drug Price Negotiation Program at Section 1191 et seq. of the Social Security Act (42 USC 1320f). IRC Section 5000D imposes an excise tax up to 95% on manufacturers who refuse to negotiate, effectively forcing participation.
• Effective date: First 10 negotiated prices take effect January 1, 2026. Next 15 Part D drugs in 2027. Next 15 combined Part B and Part D drugs in 2028. 20 additional drugs per year thereafter.
• First 10 drugs (2026): Eliquis, Jardiance, Xarelto, Januvia, Farxiga, Entresto, Enbrel, Imbruvica, Stelara, and Fiasp/NovoLog. Maximum Fair Prices reduce list prices by 38% to 79%.
• Selection criteria: Top 50 negative Part D spending drugs without generic or biosimilar competition. Small-molecule drugs eligible 9-12 years after FDA approval; biologics 11-13 years.
• Maximum Fair Price methodology: Applicable percentage of non-Federal Average Manufacturer Price (AMP). 75% for short-monopoly drugs, 65% for extended, 40% for long-monopoly.
• For Georgia families: Lower per-fill cost-sharing at the pharmacy counter. Slower accumulation toward $2,000 OOP cap. GeorgiaCares (1-866-552-4464) provides free counseling on how MFPs affect your plan.
• Constitutional litigation: Merck, BMS, Boehringer Ingelheim, AstraZeneca, Novartis, Novo Nordisk, and Janssen filed federal lawsuits. Courts have largely sided with the government; the program continues. :::

Federal framework: Section 11401 and the carve-out from the non-interference clause

To understand the Medicare Drug Price Negotiation Program, it helps to start with what came before it. When Congress enacted Medicare Part D through the Medicare Modernization Act of 2003 (MMA), it included Section 1860D-11(i) of the Social Security Act, which expressly prohibited the Secretary of HHS from:

• Interfering in negotiations between drug manufacturers, pharmacies, and Part D plans
• Requiring a particular formulary or instituting a price structure for drug reimbursement
• Establishing a specific formulary

This "non-interference clause" was a deliberate design choice in 2003: Congress wanted Part D to operate through competing private plans negotiating prices through pharmacy benefit managers (PBMs), rather than having the government set prices directly as in Medicaid (where the Medicaid Drug Rebate Program at Section 1927 SSA establishes formula-based rebates). The result was a system in which Medicare beneficiaries received some discounts through private plan negotiations but the federal government, the single largest payer, did not directly negotiate.

The Inflation Reduction Act of 2022, signed by President Biden on August 16, 2022, carved out an exception to the non-interference clause for "selected drugs" under the new Negotiation Program. Section 11401 IRA created Sections 1191 through 1198 of the Social Security Act, establishing the legal framework for the new program. The non-interference clause continues to apply to all other Part D drugs not selected for negotiation.

Section 1191 SSA: Establishment of the program

Section 1191 establishes the Medicare Drug Price Negotiation Program and authorizes HHS to:

• Designate selected drugs each year from the qualifying-drug pool
• Negotiate Maximum Fair Prices (MFPs) with manufacturers
• Require manufacturers to provide MFP-eligible beneficiaries access at MFP through dispensing entities
• Publish information about the program

Section 1192 SSA: Selection criteria

Section 1192 defines which drugs are eligible for negotiation:

• "Negotiation-eligible drug" means a qualifying single source drug in the top 50 negatively-priced Part D drugs
• Excludes orphan drugs (single FDA-approved indication for a rare disease)
• Excludes plasma-derived products
• Excludes low-spend drugs (under $200 million annual Part D spending)
• Excludes drugs less than 9 years post-FDA approval (small molecule) or 11 years (biologic)

CMS publishes the list of selected drugs annually:

• 10 drugs for 2026 (announced August 2023, MFPs published August 2024)
• 15 additional Part D drugs for 2027 (announced January 2025)
• 15 additional combined Part B and Part D drugs for 2028
• 20 additional drugs per year for 2029 and beyond

Section 1193 SSA: Negotiation process

The negotiation process unfolds across approximately two years:

• February of selection year: CMS publishes list of selected drugs
• October: CMS makes initial offer to manufacturer
• February (next year): manufacturer counter-offer
• August: negotiation concludes; MFP published
• January (following year): MFP takes effect at pharmacy counter

For the 10 drugs effective January 1, 2026, this timeline ran from August 2023 (selection) through August 2024 (MFP publication) to January 2026 (effective date).

Section 1194 SSA: Maximum Fair Price (MFP) calculation

The MFP cannot exceed the lower of two ceilings:

Ceiling A: The drug's non-Federal Average Manufacturer Price (AMP) multiplied by an applicable percentage based on time since FDA approval:

• Short-monopoly drugs (small molecule 9-12 years; biologic 11-13 years): 75% of non-Federal AMP
• Extended-monopoly drugs (small molecule 12-16 years; biologic 13-16 years): 65% of non-Federal AMP
• Long-monopoly drugs (16+ years post-approval): 40% of non-Federal AMP

Ceiling B: An "international reference price" comparison and other factors specified in statute.

CMS applies the methodology and publishes the MFP. The MFP is "fair" by statutory definition. Many manufacturers and economists disagree, but the methodology is binding under the law.

IRC Section 5000D: Excise tax on non-participating manufacturers

To enforce participation, Congress added Section 5000D to the Internal Revenue Code. A manufacturer that does not enter into a Negotiation Program agreement faces an excise tax on the manufacturer's sales of the drug in the US. The tax rates climb steeply:

• Days 1-90 of non-compliance: 65% of sales
• Days 91-180: 75% of sales
• Days 181-270: 85% of sales
• Days 271+: 95% of sales

A 95% excise tax on US drug sales is, in practice, prohibitive. Most manufacturers would lose more from the tax than from accepting the MFP, so the structure compels participation through economic force rather than direct mandate. The constitutionality of this enforcement mechanism is at the heart of the manufacturer lawsuits discussed later in this guide.

The first 10 selected drugs: Maximum Fair Prices effective January 1, 2026

CMS announced the first 10 selected drugs in August 2023 and published the negotiated Maximum Fair Prices in August 2024. The MFPs took effect at the Part D pharmacy counter on January 1, 2026. Here are the 10 drugs with their approximate 2024 list prices and 2026 MFPs.

For Georgia Medicare beneficiaries, the practical impact is most concentrated on the cardiovascular and diabetes drugs (Eliquis, Xarelto for anticoagulation; Jardiance, Januvia, Farxiga for diabetes; Entresto for heart failure) because these conditions are highly prevalent among older adults. The biologic and specialty drugs (Enbrel, Imbruvica, Stelara) affect fewer beneficiaries but with much higher dollar savings per affected person.

How MFPs flow operationally through Part D in Georgia

The Maximum Fair Price is not just a number on a CMS website. It changes how Part D plans, pharmacies, and beneficiaries transact at the counter. Here is how the flow works.

At the manufacturer level

Each participating manufacturer signs an agreement with HHS committing to:

• Provide MFP access to MFP-eligible individuals (Medicare beneficiaries enrolled in Part D)
• Process MFP discounts through the Medicare Transaction Facilitator (MTF), a CMS-administered claims processing system launched January 2026
• Publish MFP transparently per Section 1196
• Refrain from raising other prices or restricting access in retaliation

At the Part D plan level

Part D plans (standalone PDPs and Medicare Advantage Prescription Drug plans, or MA-PDs) continue to negotiate with manufacturers for additional rebates above the MFP. Plans must:

• Charge beneficiaries cost-sharing based on MFP, not list price
• Maintain the drug on formulary if previously covered (Section 1192 includes anti-discrimination provisions)
• Process claims through MTF for rebate flow

At the pharmacy level

Pharmacies fill prescriptions and submit claims to plans as before. The pharmacy:

• Receives full reimbursement from the plan (the plan eats the difference, recouped via manufacturer rebates through MTF)
• Collects beneficiary cost-sharing based on MFP-driven pricing
• Provides the drug to the beneficiary

Georgia pharmacies, including major chains (CVS, Walgreens, Walmart, Kroger, Publix), regional chains, and independents, have been integrated into the MTF system. Some independent Georgia pharmacies have expressed cash flow concerns during the MTF rollout, but most processing is now standardized.

At the beneficiary level

The Georgia Medicare beneficiary experiences the MFP through reduced cost-sharing at the pharmacy counter. For a beneficiary on Eliquis at 25% coinsurance:

• 2024: 25% × $521 = $130.25 per month
• 2026: 25% × $231 = $57.75 per month
• Monthly savings: $72.50
• Annual savings: $870

The reduced cost-sharing also flows toward the $2,000 OOP cap more slowly. A beneficiary on Eliquis alone in 2024 at $130.25/month would reach $1,563 in OOP across 12 months, close to but not exceeding the cap. The same beneficiary in 2026 at $57.75/month reaches only $693 in OOP across 12 months, well below the cap.

Interaction with the $2,000 out-of-pocket cap under IRA Section 11201

The Medicare Drug Price Negotiation Program (IRA Section 11401) and the $2,000 annual out-of-pocket cap (IRA Section 11201) are complementary cost-saving reforms but operate independently. Both protect beneficiaries; together they protect more.

Lower per-fill cost slows accumulation toward $2,000 cap

For beneficiaries on a single negotiated drug, lower MFPs reduce monthly OOP and slow the rate at which the beneficiary reaches the $2,000 cap. Many beneficiaries on a single negotiated drug never reach the cap.

Multi-drug regimens still benefit from $2,000 cap

For beneficiaries on multiple high-cost drugs (e.g., a heart-failure-with-diabetes patient on Eliquis + Jardiance + Entresto), even with MFPs the combined cost may still exceed the $2,000 cap. The cap protects against catastrophic accumulation regardless of MFP availability.

Catastrophic phase: $0 cost-sharing remains

Effective 2025 under IRA Section 11201, beneficiaries pay $0 cost-sharing in the catastrophic phase. This applies regardless of MFP. Once a beneficiary hits the $2,000 cap, additional fills cost the beneficiary nothing for the rest of the year.

M3P interaction

The Medicare Prescription Payment Plan (M3P) under IRA Section 11202 lets beneficiaries spread the $2,000 OOP across 12 monthly installments. M3P operates independently of MFP and applies to the beneficiary's total Part D OOP, including MFP-discounted fills.

Constitutional litigation: status as of May 2026

Following the Negotiation Program's enactment in August 2022, multiple major pharmaceutical manufacturers filed federal lawsuits challenging the program on constitutional grounds. The challenges raised four primary arguments.

Fifth Amendment takings: Manufacturers argued that forcing them to sell drugs at a government-determined MFP below market price constitutes a regulatory taking without just compensation. Courts have responded that participation in Medicare is voluntary; manufacturers can withdraw drugs from Medicare to avoid the MFP requirement (though the practical impossibility of doing so was central to the legal disputes).

First Amendment compelled speech: Manufacturers argued that the requirement to sign an "agreement" and use specific terminology (e.g., "Maximum Fair Price") compels speech in violation of the First Amendment. Courts have found that ordinary commercial transactions, including required disclosures and contractual agreements, do not implicate compelled speech doctrine in this context.

Eighth Amendment excessive fines: Manufacturers argued that the IRC Section 5000D excise tax (up to 95% of sales) is grossly disproportionate to any government interest and constitutes an excessive fine. Courts have responded that the tax is enforcement of a voluntary regulatory program, not a punitive fine, and is properly enacted under Congress's tax power.

Due process: Manufacturers argued that the price-selection methodology is arbitrary and capricious, violating procedural and substantive due process. Courts have found the methodology rationally related to legitimate government interests in reducing Medicare spending.

Key cases and outcomes (as of May 2026)

• Merck v. Becerra (D.C. Circuit): District court dismissed; D.C. Circuit affirmed. Merck participating in Januvia at $113 MFP.
• Bristol-Myers Squibb v. Becerra (D.N.J.): District court dismissed; Third Circuit affirmed. BMS participating in Eliquis at $231 MFP.
• Boehringer Ingelheim v. HHS (D. Conn.): Dismissed. BI participating in Jardiance at $197 MFP.
• AstraZeneca v. Becerra (D. Del.): Dismissed. AstraZeneca participating in Farxiga at $178 MFP.
• Novartis v. Becerra (D.N.J.): Dismissed. Novartis participating in Entresto at $295 MFP.
• Novo Nordisk v. Becerra (D.N.J.): Dismissed. Novo Nordisk participating in Fiasp/NovoLog at $119 MFP.
• Janssen v. Becerra (D.N.J.): Dismissed. Janssen participating in Xarelto and Stelara.
• Astellas v. Becerra: Voluntarily withdrew lawsuit, signed agreement.

The Supreme Court has not yet granted certiorari on any of the cases. Most manufacturers are now operating under signed agreements while preserving their right to appeal. The program continues to operate, and 2027 selections were announced on schedule in January 2025.

Future negotiation schedule: 2027 through 2029 and beyond

The Negotiation Program continues to expand each year. The schedule established by IRA Section 11401 and Section 1195 SSA is as follows.

2027: 15 additional Part D drugs

Selected drugs include treatments for diabetes, weight loss (Ozempic), pulmonary disease (Trelegy Ellipta), blood cancer (Calquence), neurological conditions (Austedo), GI conditions (Linzess), and others. CMS announced selections in January 2025; MFPs are scheduled for publication in 2026 with January 1, 2027 effective date.

2028: 15 additional combined Part B and Part D drugs

For the first time, Part B drugs (physician-administered drugs covered under Medicare Part B, such as infusion biologics for cancer and rheumatology) become eligible for negotiation. This significantly expands the program's scope.

2029 and beyond: 20 additional drugs per year

After 2028, the program selects 20 additional drugs annually from the combined Part B and Part D pool. The cumulative effect grows substantially over the decade. By 2030, more than 60 drugs will have negotiated prices in effect simultaneously, fundamentally changing Medicare drug economics.

Six worked examples: Georgia beneficiary savings on the first 10 drugs

Worked example 1: Margaret 65 Atlanta Eliquis (anticoagulation)

Margaret, 65, an Atlanta retiree, was diagnosed with atrial fibrillation in January 2025 and prescribed Eliquis. Her standalone Part D plan placed Eliquis on Tier 3 with 25% coinsurance.

Margaret's Eliquis cost over time:

• January 2025: 2025 list price approximately $521/month, 25% coinsurance = $130.25/month
• January 2026: MFP $231/month, 25% coinsurance = $57.75/month
• Monthly savings: $72.50
• Annual savings: $870
• 2026 OOP for Eliquis alone: $693 (well below $2,000 cap)

Margaret's plan still requires the $590 Part D deductible. She pays $590 January through about late February (deductible phase), then 25% coinsurance until reaching $2,000 OOP. With Eliquis at MFP, she never reaches the cap unless she adds other high-cost drugs.

Worked example 2: Robert 68 Savannah dual diabetes regimen (Jardiance + Januvia)

Robert, 68, a Savannah retiree, has Type 2 diabetes managed since 2022 with Jardiance and Januvia. His Part D plan places both on Tier 3 with 25% coinsurance.

Robert's combined diabetes cost over time:

• 2024 list prices: Jardiance $573 + Januvia $527 = $1,100/month combined
• 2024 OOP at 25%: $275/month, $3,300/year (Robert reached $2,000 cap in August 2024 before IRA cap took effect)
• 2026 MFPs: Jardiance $197 + Januvia $113 = $310/month combined
• 2026 OOP at 25%: $77.50/month, $930/year
• Annual savings: $2,370 in 2026 vs 2024
• 2026 OOP does not reach $2,000 cap; Robert pays full annual OOP

Worked example 3: Linda 70 Macon Enbrel (rheumatoid arthritis specialty)

Linda, 70, a Macon retiree, has been on Enbrel for rheumatoid arthritis since 2020. Her Part D plan places Enbrel on Tier 5 specialty with 33% coinsurance.

Linda's Enbrel cost over time:

• 2024 list price $7,106/month, 33% coinsurance = $2,344/month
• Linda hit her 2024 maximum OOP ($8,000 catastrophic threshold pre-IRA) in late January 2024
• 2026 MFP $2,355/month, 33% coinsurance = $777/month
• Linda hits $2,000 cap in March 2026 (about 2.6 months of Enbrel + $590 deductible)
• 2026 annual OOP capped at $2,000 vs 2024 ~$5,000 to $6,000 OOP

Linda also benefits from the IRA $0 catastrophic phase. After hitting $2,000 cap in March, she pays $0 the rest of the year regardless of how many Enbrel fills.

Worked example 4: Charles 73 Augusta Entresto (heart failure)

Charles, 73, an Augusta retiree, was diagnosed with heart failure in 2023 and prescribed Entresto. His Part D plan places Entresto on Tier 3 with 25% coinsurance.

Charles's Entresto cost over time:

• 2024 list price $628/month, 25% coinsurance = $157/month
• 2026 MFP $295/month, 25% coinsurance = $73.75/month
• Monthly savings: $83.25
• Annual savings: $999

Charles's annual OOP on Entresto alone: $885 in 2026, well below $2,000 cap. If Charles also takes a diuretic (low-cost) and a beta blocker (generic, low cost), his total OOP probably stays around $1,000 to $1,500 annually.

Worked example 5: Patricia 65 Columbus Stelara (plaque psoriasis biologic)

Patricia, 65, a Columbus retiree, has plaque psoriasis treated with Stelara infusions every 12 weeks. Her Part D plan places Stelara on Tier 5 specialty with 33% coinsurance.

Patricia's Stelara cost over time:

• 2024 per-infusion cost: $13,836 × 33% = $4,566 per infusion
• Patricia hit her 2024 annual OOP cap on her first 2024 infusion
• 2026 MFP $4,695 × 33% = $1,549 per infusion
• Patricia hits $2,000 cap on her second infusion (April 2026 after January infusion of $1,549 + $590 deductible)
• 2026 annual OOP capped at $2,000

For Patricia, the MFP reduces her per-infusion cost by a factor of nearly 3, but the $2,000 cap remains her ultimate protection. Both reforms together (MFP + $2,000 cap) protect her from runaway costs.

Worked example 6: Henry 75 Athens Fiasp insulin

Henry, 75, an Athens retiree, has Type 2 diabetes on insulin (Fiasp). He benefits from two IRA provisions: the Section 11406 insulin cap (effective 2023) and the Section 11401 MFP (effective 2026).

Henry's Fiasp cost over time:

• 2022 list price: $495/month, 25% coinsurance = $124/month (no cap)
• 2023 insulin cap: $35/month (Section 11406 effective)
• 2026 MFP $119/month, 25% coinsurance = $29.75/month (below $35 cap)
• 2026 effective cost: $29.75/month (lower of MFP-driven cost-sharing or $35 cap)
• Annual savings: from $124/month (pre-cap pre-MFP) to $29.75/month (cap + MFP)

For Henry, the $35 insulin cap was the primary protection from 2023 through 2025. With the 2026 MFP, his actual cost-sharing dropped further to $29.75. The MFP and the insulin cap work together: whichever is lower binds for Henry.

Plan formularies and tier placement

Even with MFPs in effect, Georgia beneficiaries must confirm their plan covers the negotiated drug and at what tier. The $2,000 OOP cap and MFP discounts only apply to drugs on the plan formulary. A drug not on the plan formulary is not covered (unless a coverage exception is granted under Section 1860D-4(g)).

What to check during Annual Enrollment Period

For Georgia beneficiaries comparing plans during the October 15 to December 7 Annual Enrollment Period:

• Confirm each of your medications is on the plan formulary
• Check the tier placement (Tier 5 specialty vs Tier 3 brand vs Tier 2 generic)
• Confirm preferred pharmacy network includes your local pharmacy
• Compare premium + deductible + expected cost-sharing across plans
• Use Medicare Plan Finder at medicare.gov or GeorgiaCares counseling for help

Tier placement does not change MFP

MFP-eligible cost-sharing is based on plan tier. Plans cannot retaliate against negotiated drugs by moving them to higher tiers; CMS rules prohibit anti-MFP formulary discrimination. However, plans retain general formulary discretion within their tier structure.

Manufacturers and the future of US drug pricing

The Medicare Drug Price Negotiation Program represents a profound shift in US drug pricing. By creating a price benchmark for high-spend Medicare drugs, the program changes manufacturer incentives across the entire pharmaceutical market. Some likely effects:

Commercial market spillover

While the MFP applies only to Medicare, commercial insurers and PBMs use Medicare benchmarks in their own negotiations. Lower Medicare prices may pressure commercial prices indirectly, though manufacturers may also offset Medicare losses by raising commercial prices.

R&D investment patterns

Manufacturers argue that lower Medicare prices reduce R&D investment in expensive late-stage drugs. Government studies (CBO and others) project modest reductions in new drug development but argue that overall consumer welfare improves.

International reference pricing

The MFP methodology incorporates international reference pricing in some cases. This formalizes a long-standing complaint that the US pays disproportionately more than other developed nations.

Patent and exclusivity strategies

Manufacturers may pursue patent extensions and minor reformulations more aggressively to delay generic entry, since drugs become negotiation-eligible only after 9-13 years of FDA approval. This dynamic is being studied by CBO and FTC.

15 common mistakes Georgia beneficiaries make about drug price negotiation

1. Thinking MFPs apply to all drugs. Only 10 drugs in 2026, 15 more in 2027, etc. The vast majority of drugs are not negotiated.

2. Confusing MFP with the $35 insulin cap. The insulin cap is IRA Section 11406; the MFP is IRA Section 11401. Different provisions, different mechanisms.

3. Believing MFPs apply to commercial insurance. MFPs apply only to Medicare beneficiaries through participating manufacturers. Commercial market prices are unaffected directly.

4. Not realizing MFPs apply at the pharmacy counter. The MFP is operationalized through the Part D plan; beneficiaries see lower cost-sharing automatically.

5. Thinking MFPs only apply in catastrophic phase. MFPs apply throughout all Part D phases (deductible, initial coverage, catastrophic).

6. Believing pharmacy networks no longer matter. In-network rules still apply. Out-of-network drug costs do not count toward $2,000 OOP cap.

7. Missing the $2,000 OOP cap interaction. Lower MFPs slow accumulation toward the cap. Many single-drug beneficiaries on negotiated drugs never reach the cap.

8. Confusing manufacturer rebates with MFP discounts. Plans still negotiate rebates above MFP. The MFP is the floor; plans may secure additional discounts.

9. Thinking MFPs reduce list prices in the commercial market. Manufacturers can charge any price they want commercially; only Medicare gets the MFP.

10. Believing CMS sets prices unilaterally. The process involves manufacturer counter-offers, evidence submissions, and a defined methodology. Manufacturers participate.

11. Not understanding that manufacturers can withdraw drugs from Medicare. They can in theory; in practice, the 95% excise tax under IRC Section 5000D makes withdrawal economically prohibitive.

12. Confusing MFP with Average Sales Price (ASP) or AMP. ASP is the Medicare Part B reimbursement benchmark; AMP is the Medicaid benchmark. MFP is a new third pricing benchmark for selected Part D drugs.

13. Missing the future negotiation schedule. 15 more drugs in 2027, 20 per year after 2029. The program continues to expand.

14. Not realizing courts have largely upheld the program. Manufacturer constitutional challenges have lost at district court and appellate levels. The program continues to operate.

15. Believing pharmacists can give MFP information off-label. Pharmacists are limited in what they can communicate about prices. For specific MFP questions, contact your plan, Medicare, or GeorgiaCares.

Quick reference: 2026 MFPs and Georgia beneficiary impact

::: callout type="key-takeaways" Key takeaways

• The Medicare Drug Price Negotiation Program was created by Inflation Reduction Act 2022 Section 11401, codified at Section 1191 et seq. of the Social Security Act (42 USC 1320f).
• The first 10 Maximum Fair Prices took effect January 1, 2026, for Eliquis, Jardiance, Xarelto, Januvia, Farxiga, Entresto, Enbrel, Imbruvica, Stelara, and Fiasp/NovoLog. Prices reduced by 38% to 79% from 2024 list prices.
• The IRC Section 5000D excise tax (up to 95% of sales) effectively forces manufacturer participation.
• Constitutional litigation by Merck, BMS, Janssen, Boehringer Ingelheim, AstraZeneca, Novartis, and Novo Nordisk has largely been unsuccessful; courts have upheld the program.
• 15 additional Part D drugs in 2027, 15 combined Part B and Part D drugs in 2028, 20 drugs per year thereafter. The program expands substantially.
• For Georgia beneficiaries: lower per-fill cost-sharing at the pharmacy, slower accumulation toward the $2,000 OOP cap under IRA Section 11201, and overall reduced annual drug spending on negotiated drugs.
• GeorgiaCares (1-866-552-4464) provides free counseling on how MFPs and the $2,000 cap affect your specific Part D plan. :::

::: accordion

What is the Medicare Drug Price Negotiation Program?

The Medicare Drug Price Negotiation Program, created by Inflation Reduction Act 2022 Section 11401 and codified at Section 1191 et seq. of the Social Security Act, authorizes HHS to negotiate prices for high-spend Medicare Part D drugs (and beginning 2028, Part B drugs) directly with pharmaceutical manufacturers. Before IRA 2022, the federal government was statutorily prohibited from negotiating Medicare drug prices under Section 1860D-11(i).

What is a Maximum Fair Price (MFP)?

The Maximum Fair Price is the negotiated price ceiling for a selected drug under the Medicare Drug Price Negotiation Program. The MFP cannot exceed a statutory ceiling based on the drug's non-Federal Average Manufacturer Price (AMP) multiplied by an applicable percentage (75%, 65%, or 40% depending on time since FDA approval).

Which drugs were selected for 2026 negotiation?

Ten drugs: Eliquis (Bristol-Myers Squibb), Jardiance (Boehringer Ingelheim/Lilly), Xarelto (Janssen), Januvia (Merck), Farxiga (AstraZeneca), Entresto (Novartis), Enbrel (Amgen), Imbruvica (AbbVie/J&J), Stelara (Janssen), and Fiasp/NovoLog (Novo Nordisk). MFPs took effect January 1, 2026, reducing list prices by 38% to 79%.

How does the selection process work?

CMS selects drugs each year from the top 50 negatively-priced Part D drugs by spending. Selected drugs must lack generic or biosimilar competition, be at least 9 years past FDA approval (small molecule) or 11 years (biologic), and meet other criteria under Section 1192 of the Social Security Act.

Are there future negotiations planned?

Yes. 15 additional Part D drugs are scheduled for 2027, 15 additional combined Part B and Part D drugs for 2028, and 20 drugs per year thereafter. The program continues to expand substantially.

How are MFPs calculated?

The MFP is the lower of two ceilings. Ceiling A is the non-Federal Average Manufacturer Price multiplied by an applicable percentage: 75% for short-monopoly drugs (small molecule 9-12 years post-FDA, biologic 11-13 years), 65% for extended-monopoly drugs (12-16 years), and 40% for long-monopoly drugs (16+ years). Ceiling B incorporates other factors including international reference comparisons.

Are manufacturers required to participate?

Manufacturers technically choose whether to enter Negotiation Program agreements. However, IRC Section 5000D imposes an excise tax up to 95% of US sales on manufacturers who do not participate. The tax structure effectively compels participation.

Did manufacturers challenge the program in court?

Yes. Merck, Bristol-Myers Squibb, Janssen, Boehringer Ingelheim, AstraZeneca, Novartis, and Novo Nordisk filed federal lawsuits challenging the program on Fifth Amendment takings, First Amendment compelled speech, Eighth Amendment excessive fines, and due process grounds. As of May 2026, courts have dismissed all challenges; all manufacturers are now operating under signed agreements.

What does MFP mean for my pharmacy cost?

If you take one of the negotiated drugs, you will see lower cost-sharing at the pharmacy counter starting January 1, 2026. For example, Eliquis at 25% coinsurance dropped from $130/month to $58/month. Annual savings can range from $300 to $1,500 per negotiated drug.

Does MFP apply to commercial insurance?

No. MFPs apply only to Medicare beneficiaries. Commercial market prices are not directly affected, though some indirect spillover effects on PBM negotiations are possible.

Does MFP affect insulin pricing differently?

Fiasp/NovoLog insulin has both the IRA Section 11406 $35/month cap (effective 2023) and the 2026 MFP. The effective cost-sharing for insulin is the lower of MFP-driven coinsurance or the $35 cap. For most beneficiaries, the MFP at 25% coinsurance ($29.75 for Fiasp) is below the $35 cap.

How does MFP interact with the $2,000 OOP cap?

The $2,000 annual out-of-pocket cap under IRA Section 11201 took effect January 2025. MFPs (effective 2026) reduce per-fill cost-sharing, slowing accumulation toward the $2,000 cap. Many single-drug beneficiaries on negotiated drugs never reach the cap. Multi-drug beneficiaries still benefit from the cap protection.

Does my plan still cover the negotiated drug?

Plans must keep negotiated drugs on formulary if previously covered; anti-discrimination provisions in Section 1192 prevent retaliatory removal. Confirm formulary placement during Annual Enrollment Period (October 15 to December 7) or by contacting your plan.

Does MFP apply at out-of-network pharmacies?

MFPs apply at any Part D in-network pharmacy. Out-of-network drug costs are generally not covered under Part D plans except in emergencies, and do not count toward the $2,000 OOP cap.

Can I use mail-order to get my negotiated drug?

Yes. Mail-order pharmacies, often offering 90-day fills at lower per-day cost, are common in Part D plans. The MFP applies to mail-order fills the same as retail.

What if my plan doesn't list the MFP correctly?

Contact your plan directly first. If unresolved, file a grievance with the plan, then file a complaint with Medicare at 1-800-MEDICARE. The Medicare Beneficiary Ombudsman provides escalation for unresolved disputes.

Does the IRA $35 insulin cap still apply?

Yes. The IRA Section 11406 $35/month cap on insulin (Fiasp/NovoLog and other insulin products) remains in effect through 2026 and beyond. The cap applies regardless of MFP status.

What about Medicare Advantage Prescription Drug plans (MA-PDs)?

MA-PDs are subject to the same MFP requirements as standalone Part D plans (PDPs). Beneficiaries enrolled in MA-PDs benefit from MFPs on negotiated drugs in their plan's formulary.

Does MFP apply to Low Income Subsidy (LIS) recipients?

LIS recipients (Extra Help) already pay minimal copayments well below MFP-driven cost-sharing. MFPs reduce the government cost of subsidizing LIS but do not directly change beneficiary cost. LIS recipients pay $1.55 (generic) or $4.60 (brand) in 2026.

What is the Medicare Transaction Facilitator (MTF)?

The Medicare Transaction Facilitator is a CMS-administered claims processing system launched January 2026 to handle MFP rebate flow between manufacturers, plans, and pharmacies. Most processing is now standardized; beneficiaries do not interact directly with MTF.

Will more drugs be negotiated each year?

Yes. CMS selects 15 additional Part D drugs for 2027 (announced January 2025), 15 combined Part B and Part D drugs for 2028, and 20 drugs per year thereafter. By 2030, more than 60 drugs will have negotiated prices.

What was the non-interference clause?

Section 1860D-11(i) of the Social Security Act, enacted as part of the Medicare Modernization Act 2003, prohibited HHS from interfering in price negotiations between drug manufacturers, pharmacies, and Part D plans. The IRA 2022 carved out exceptions for selected drugs under the new Negotiation Program; the non-interference clause continues to apply to all non-selected drugs.

How can I learn which of my drugs are negotiated?

Check the CMS website at cms.gov/inflation-reduction-act for the current list of negotiated drugs and their MFPs. Your Part D plan must also identify negotiated drugs in your formulary. GeorgiaCares (1-866-552-4464) provides free counseling on plan-specific impact.

Where can I get free Georgia counseling on Part D and drug pricing?

GeorgiaCares is Georgia's State Health Insurance Assistance Program (SHIP) providing free one-on-one counseling on Medicare. Call 1-866-552-4464. Counselors help compare plans, evaluate drug coverage, apply for LIS Extra Help, and resolve plan disputes.

Are biosimilars and generics affected by the program?

Generally no. Selected drugs are by definition those without generic or biosimilar competition. Once a generic or biosimilar enters the market, the drug typically loses its single-source status and may exit the Negotiation Program. :::

::: cta Georgia Medicare Drug Price Negotiation Resources

Free help understanding the Medicare Drug Price Negotiation Program, Maximum Fair Prices for the first 10 selected drugs, the $2,000 out-of-pocket cap interaction, and your Part D options is available from these Georgia and federal organizations.

• GeorgiaCares (Georgia SHIP): 1-866-552-4464 : free one-on-one Part D plan counseling
• Medicare: 1-800-MEDICARE (1-800-633-4227) : Part D enrollment, MFP questions
• Social Security Administration: 1-800-772-1213 : Low Income Subsidy applications
• Georgia Department of Community Health Medicaid Member Services: 1-866-211-0950 : LIS coordination for dual eligibles
• Georgia Office of Insurance Commissioner: 1-800-656-2298 : plan complaints
• AARP Georgia: 1-866-295-7283 : senior advocacy
• Medicare Rights Center: 1-800-333-4114 : national helpline for Part D appeals
• Center for Medicare Advocacy: 1-860-456-7790 : legal assistance for Medicare disputes
• Justice in Aging: 202-289-6976 : national legal advocacy for low-income seniors
• Medicare Beneficiary Ombudsman: assistance with unresolved Medicare complaints
• Eldercare Locator: 1-800-677-1116 : connects to local Georgia Area Agencies on Aging
• 211 Georgia: dial 211 : referrals to local senior assistance
• Atlanta Legal Aid Senior Citizens Law Project: 404-377-0701
• Georgia Legal Services Program: 1-800-498-9469 : legal aid statewide outside Atlanta metro
• Palmetto GBA Georgia MAC: 1-855-696-0705 : Georgia Medicare Administrative Contractor
• CMS Region IV Office (Atlanta): regional CMS office for Georgia Part D
• Georgia Department of Human Services Division of Aging: aging.georgia.gov : state aging services
• Brevy: brevy.com : comprehensive eldercare guides including Part D, the $2,000 OOP cap, Medicare Drug Price Negotiation, and Low Income Subsidy resources for Georgia families :::

Disclaimer: This guide is for informational purposes only and does not constitute legal, financial, medical, or insurance advice. Medicare Part D rules, the Medicare Drug Price Negotiation Program Maximum Fair Prices, the $2,000 out-of-pocket cap, Low Income Subsidy thresholds, and plan-specific formularies change annually. Federal authorities cited include Section 11401 of the Inflation Reduction Act 2022 (Public Law 117-169), Sections 1191-1198 of the Social Security Act (42 USC 1320f), IRC Section 5000D, 42 CFR Part 423 Subpart W, and CMS guidance current as of May 2026. For your specific situation, contact GeorgiaCares (1-866-552-4464) for free counseling or Medicare (1-800-MEDICARE) directly.