By Brevy Care Team

What is the Medicare Drug Price Negotiation Program?

The Medicare Drug Price Negotiation Program is the most consequential prescription drug pricing reform in Medicare since the Medicare Modernization Act of 2003 created Part D. It was established by Sections 11001 and 11002 of the Inflation Reduction Act of 2022 — Public Law 117-169, signed by President Joe Biden on August 16, 2022. The program is codified at Sections 1191-1198 of the Social Security Act (42 U.S.C. § 1320f et seq.) and is administered by the Centers for Medicare & Medicaid Services (CMS).

For the first time in U.S. history, the federal government has explicit statutory authority to negotiate prescription drug prices directly with manufacturers for Medicare beneficiaries. Before the IRA, the "noninterference clause" of the Medicare Modernization Act of 2003 prohibited the Secretary of HHS from negotiating directly with drug manufacturers — a provision long defended by the pharmaceutical industry and criticized by reform advocates. The IRA repealed the noninterference clause for the drugs selected under the new negotiation program.

The program works through annual cycles:

  1. CMS publishes a list of negotiation-eligible drugs based on Medicare gross spending and other criteria.
  2. CMS selects drugs from the eligible list — currently up to 10 Part D drugs per cycle, expanding to include Part B drugs in later cycles.
  3. CMS negotiates with each manufacturer to establish a Maximum Fair Price (MFP) for each selected drug.
  4. The MFP becomes effective for Medicare beneficiaries beginning the price applicability year — typically two years after the selection year.

The first cycle selected ten Part D drugs in August 2023, completed negotiations in summer 2024, and announced final MFPs on August 15, 2024. Those MFPs became effective January 1, 2026 — meaning the first cycle savings are now flowing to Medicare beneficiaries as of the date of this guide.

The first cycle negotiated drugs (effective January 1, 2026)

The first cycle Maximum Fair Prices apply to ten Part D drugs that together accounted for approximately $50 billion in annual Medicare gross spending. The ten drugs are:

  1. Eliquis (apixaban) — Bristol-Myers Squibb / Pfizer — anticoagulant for atrial fibrillation and venous thromboembolism prevention/treatment. The most-prescribed direct oral anticoagulant in Georgia and nationally.

  2. Jardiance (empagliflozin) — Boehringer Ingelheim / Lilly — SGLT2 inhibitor for type 2 diabetes, heart failure, and chronic kidney disease.

  3. Xarelto (rivaroxaban) — Janssen (Johnson & Johnson) — direct oral anticoagulant for atrial fibrillation and venous thromboembolism prevention/treatment.

  4. Januvia (sitagliptin) — Merck — DPP-4 inhibitor for type 2 diabetes.

  5. Farxiga (dapagliflozin) — AstraZeneca — SGLT2 inhibitor for type 2 diabetes, heart failure, and chronic kidney disease.

  6. Entresto (sacubitril/valsartan) — Novartis — angiotensin receptor-neprilysin inhibitor (ARNI) for heart failure with reduced ejection fraction.

  7. Enbrel (etanercept) — Amgen — TNF-alpha inhibitor for rheumatoid arthritis, plaque psoriasis, psoriatic arthritis, ankylosing spondylitis, and juvenile idiopathic arthritis.

  8. Imbruvica (ibrutinib) — AbbVie / Pharmacyclics — Bruton tyrosine kinase inhibitor for chronic lymphocytic leukemia, mantle cell lymphoma, Waldenström macroglobulinemia, marginal zone lymphoma, and chronic graft-versus-host disease.

  9. Stelara (ustekinumab) — Janssen — interleukin-12 and IL-23 inhibitor for plaque psoriasis, psoriatic arthritis, Crohn's disease, and ulcerative colitis.

  10. Fiasp / NovoLog (insulin aspart) — Novo Nordisk — rapid-acting insulin for diabetes management.

Across these ten drugs, the negotiated MFPs represent discounts ranging from approximately 38% to 79% off the drugs' 2023 list prices. CMS estimates that beneficiaries who take these drugs will save approximately $1.5 billion in out-of-pocket costs in 2026, with Medicare program savings totaling approximately $6 billion.

The second cycle negotiated drugs (effective January 1, 2027)

On January 17, 2025, CMS announced the fifteen Part D drugs selected for the second negotiation cycle. The MFPs for these drugs will be negotiated through 2025 and announced in mid-2026, with effective dates of January 1, 2027. The second cycle drugs include additional cardiovascular, diabetes, oncology, autoimmune, and other high-Medicare-spend drugs.

(For the current list of second cycle drugs, beneficiaries should consult CMS's published list. The second cycle has been targeted by additional manufacturer litigation but as of May 14, 2026, the negotiations are proceeding on schedule.)

Future cycles — adding Part B drugs

The IRA expands the Drug Price Negotiation Program over time:

  • First cycle (selected 2023, effective 2026): 10 Part D drugs.
  • Second cycle (selected 2025, effective 2027): 15 Part D drugs.
  • Third cycle (selected 2026, effective 2028): 15 drugs from Part B and Part D combined — the first cycle to include Part B drugs (physician-administered injectables, infusions, certain oncology drugs).
  • Fourth cycle (selected 2027, effective 2029): 20 drugs from Part B and Part D combined.
  • Subsequent cycles: 20 drugs annually.

Adding Part B drugs in the third cycle is particularly significant for oncology — many of the highest-spend Part B drugs are oncology biologics, ESAs, and infused biologics. This will eventually intersect with 340B economics, ASP + 6% Part B payment, and oncology episode-based payment under the Enhancing Oncology Model.

Why the Medicare Drug Price Negotiation Program matters for Georgia eldercare

For Georgia seniors and their families, the Drug Price Negotiation Program is not theoretical — it is operationally live as of January 1, 2026. Hundreds of thousands of Georgia Medicare beneficiaries take one or more of the ten first-cycle drugs. Eliquis alone is taken by tens of thousands of Georgia seniors for atrial fibrillation; Jardiance, Farxiga, and Januvia are among the most commonly prescribed diabetes medications in Georgia; Xarelto, like Eliquis, is widely used for anticoagulation; Entresto is a cornerstone of heart failure therapy in Georgia cardiology practices.

Specifically for Georgia:

  • Hundreds of thousands of Georgia Medicare beneficiaries take one or more negotiated drugs.
  • Eliquis, Xarelto, Jardiance, Farxiga, Januvia, and Entresto are among the most-prescribed drugs in Georgia primary care, cardiology, and endocrinology practices — including major systems like Emory Healthcare, Wellstar, Piedmont Healthcare, Northside Hospital, Grady, Atrium Health Navicent, Memorial Health Savannah, Phoebe Putney, and Northeast Georgia Medical Center.
  • Georgia dual-eligibles with full Extra Help / Low-Income Subsidy already pay very low out-of-pocket costs ($0 generic, low brand copay caps), but the negotiated MFPs reduce overall Part D program costs, which over time should reduce premium and plan structure pressure.
  • Part D and MA-PD plan sponsors operating in Georgia — Humana, UnitedHealthcare, Aetna, Anthem, Wellcare/Centene, Cigna, and others — must reconfigure formularies, claims systems, and pricing to apply MFPs at the point of sale beginning January 1, 2026.
  • Section 1191(c) Best Price exclusion prevents the negotiated MFP from cascading into Medicaid Drug Rebate Program Best Price calculations — important for Georgia Medicaid and for Georgia 340B covered entities.
  • Manufacturer litigation challenges (Merck v. Becerra, BMS v. Becerra, AstraZeneca v. Becerra, Boehringer Ingelheim v. HHS, Novartis v. Becerra, Novo Nordisk v. HHS, and others) have been pursued in multiple federal circuits. As of May 2026, the challenges have largely failed at the trial court and appellate court levels — the program has proceeded.

The economics matter especially for senior beneficiaries because:

  1. Beneficiaries pay coinsurance based on the Negotiated Price (which equals the MFP for negotiated drugs) rather than on the pre-IRA list price, reducing out-of-pocket cost-sharing.
  2. The IRA Part D $2,000 out-of-pocket cap (2025) / $2,100 cap (2026) combines with negotiated drug pricing to dramatically lower senior drug costs — for the first time in Part D history, there is a hard annual out-of-pocket maximum.
  3. The IRA insulin $35-per-month copay cap (effective January 1, 2023) plus the negotiated price for Fiasp/NovoLog further reduces insulin costs for Georgia diabetes patients.
  4. Negotiated MFPs reduce overall Part D and MA-PD plan costs, which exerts downward pressure on premium and benefit design over time.
  5. The Best Price exclusion (Section 1191(c)) prevents Medicaid rebate cascade — protecting Georgia Medicaid drug rebate economics.

Statutory and regulatory foundation

Sections 11001 and 11002 of the Inflation Reduction Act of 2022

Section 11001 of the IRA (Public Law 117-169, August 16, 2022) added Part E (Sections 1191-1198) to Title XI of the Social Security Act, establishing the Drug Price Negotiation Program. Section 11002 made conforming amendments including the repeal of the noninterference clause for negotiated drugs.

Sections 1191-1198 of the Social Security Act (42 U.S.C. § 1320f et seq.)

The core statutory framework:

  • Section 1191 — Definitions, including "selected drug," "negotiation-eligible drug," "Maximum Fair Price," "manufacturer," "primary manufacturer," and importantly Section 1191(c) Best Price exclusion for the MFP.
  • Section 1192 — Selection process. CMS identifies negotiation-eligible drugs (single-source brand drugs at least 7 years from FDA approval for small-molecule drugs, 11 years for biologics, without generic/biosimilar competition) and selects the highest-spend drugs.
  • Section 1193 — Manufacturer-specific data submission requirements.
  • Section 1194 — Negotiation process. CMS makes an initial price offer; manufacturer counter-offers; CMS may accept or make a final offer; manufacturer must accept the final offer or face civil monetary penalties.
  • Section 1195 — Publication and effective date.
  • Section 1196 — Coordination with Medicare programs.
  • Section 1197 — Civil monetary penalties.
  • Section 1198 — Excise tax (a separate enforcement mechanism for non-participating manufacturers, codified at Section 5000D of the Internal Revenue Code).

CMS implementing guidance

CMS published implementing guidance:

  • Final Guidance for Initial Price Applicability Year 2026 — June 30, 2023 — establishing the framework for first cycle negotiation.
  • Revised Final Guidance for Initial Price Applicability Year 2027 — October 2, 2024 — refining the framework based on first cycle experience.
  • Subsequent guidance for third cycle and future cycles.

CMS Maximum Fair Price Announcement — August 15, 2024

CMS published the final Maximum Fair Prices for all ten first cycle drugs on August 15, 2024. The MFPs reflect significant discounts off 2023 list prices (typically 38% to 79%).

CMS Second Cycle Selected Drug List — January 17, 2025

CMS announced the fifteen Part D drugs selected for the second cycle on January 17, 2025. Negotiation is in progress; MFPs will be published in 2026 and take effect January 1, 2027.

How the MFP becomes a price patients see

The MFP is the maximum price the manufacturer can charge for the drug to dispensing entities (pharmacies, etc.) for sales to Medicare-eligible individuals. In practice, this means:

  1. Pharmacy claims adjudication: Part D plans and PBMs adjudicate claims for negotiated drugs at the MFP-based Negotiated Price.
  2. Beneficiary cost-sharing: The beneficiary's coinsurance (typically 25% in the initial coverage phase post-deductible) is calculated on the Negotiated Price — meaning the dollar amount of cost-sharing is reduced proportionally to the discount.
  3. Manufacturer Discount Program coordination: For drugs that are also subject to the new Part D Manufacturer Discount Program (which replaced the Coverage Gap Discount Program in 2025), the manufacturer pays its share of the discount as required.
  4. Manufacturer obligation: The manufacturer is required to provide the MFP at the dispensing pharmacy level. Manufacturers reconcile MFP-related payments with dispensing entities and pharmacies through retrospective reconciliation mechanisms ("MTF" or other approaches).

For dual-eligibles with full Extra Help / LIS, the beneficiary's out-of-pocket cost is capped at low fixed copay amounts regardless. The MFP primarily reduces the cost-sharing for non-LIS beneficiaries (a substantial portion of Medicare Part D enrollees).

Best Price exclusion (Section 1191(c))

A critical design feature of the IRA is Section 1191(c), which excludes the negotiated Maximum Fair Price from the "Best Price" calculation under the Medicaid Drug Rebate Program (Section 1927 of the Social Security Act).

Why this matters:

  • Without Section 1191(c), the negotiated MFP — which can be 38-79% below list price — would become the manufacturer's "Best Price" for Medicaid rebate purposes.
  • That would trigger an immediate massive Medicaid rebate increase for those drugs (the rebate formula uses AMP minus Best Price for brand drugs).
  • The cascade would shift drug discounting from a negotiated Medicare-specific reduction to a Medicaid-wide rebate increase, dramatically altering the program's fiscal impact and undermining manufacturer willingness to negotiate.

Section 1191(c) prevents this cascade. The MFP applies only to Medicare-eligible individuals; the manufacturer's other commercial and Medicaid pricing is unaffected (other than through normal market forces).

This Best Price exclusion is parallel to other statutory Best Price exclusions (340B sales, federal supply schedule under conditions, Part D Coverage Gap discount, nominal price sales to certain entities).

Coordination with Medicare Part D Manufacturer Discount Program

The IRA also created the Medicare Part D Manufacturer Discount Program (replacing the Coverage Gap Discount Program), effective January 1, 2025. Under the Manufacturer Discount Program:

  • Manufacturers of certain brand drugs in Part D plans pay discounts (10% in the initial coverage phase, 20% in the catastrophic phase) to reduce beneficiary and government drug spending.
  • For negotiated drugs, the Manufacturer Discount Program operates concurrently with the MFP — beneficiaries pay coinsurance on the MFP, and manufacturers contribute discounts as required.
  • The coordination is operationally complex but transparent to beneficiaries; pharmacies and plans handle the back-office reconciliation.

Coordination with Medicare Part B drug payment

For the third cycle (2026 selection, 2028 effective) and beyond, Part B drugs become eligible for negotiation. Part B drugs are administered in physician offices and hospital outpatient settings — chemotherapy, biologic infusions, certain injectables.

Currently, Part B drugs are paid at Average Sales Price (ASP) + 6% (Section 1847A SSA). For 340B drugs, ASP + 6% is the restored rate post-AHA v. Becerra (June 15, 2022) and the CY 2023 OPPS Remedy Rule. When Part B drugs become subject to MFPs, CMS will need to coordinate the MFP with ASP + 6% payment — the MFP will effectively replace the ASP-based payment for negotiated Part B drugs.

The intersection of MFP, ASP, 340B, and oncology episode-based payment (EOM) will be operationally complex for Georgia oncology practices, hospitals, and FQHCs.

Litigation challenges

The Drug Price Negotiation Program has been challenged in multiple federal courts by manufacturers and industry trade associations. Major lawsuits include:

  • Merck & Co. v. Becerra — Merck challenged the constitutionality of the program, arguing it violates the First Amendment compelled speech doctrine and the Fifth Amendment Takings Clause.
  • Bristol-Myers Squibb v. Becerra — BMS challenged the program on similar constitutional grounds.
  • AstraZeneca v. Becerra — AstraZeneca challenged the negotiation-eligible drug selection process.
  • Boehringer Ingelheim v. HHS — BI challenged the program structure.
  • Novartis v. Becerra — Novartis challenged Entresto's selection.
  • Novo Nordisk v. HHS — Novo Nordisk challenged the insulin aspart selection.
  • PhRMA, NICA, and U.S. Chamber lawsuits — industry trade associations filed challenges in multiple districts.

Through May 2026, the litigation has largely failed. Trial courts (in District of New Jersey, Eastern District of Texas, Southern District of Ohio, District of Connecticut, and elsewhere) and appellate courts (Third Circuit, Fifth Circuit, Sixth Circuit, Federal Circuit) have generally upheld the program against constitutional and statutory challenges. Some cases remain on appeal; isolated procedural rulings have favored manufacturers in narrow respects. But the program continues to operate, MFPs took effect January 1, 2026, and second cycle negotiations are proceeding.

Best practices for Georgia stakeholders

  1. Beneficiaries: review your Part D plan's negotiated drug formulary placement for 2026. Negotiated drugs should be on tier with reduced cost-sharing aligned to the MFP. Verify with your plan.

  2. Beneficiaries: ask your pharmacist for the Negotiated Price. Pharmacists can show you the price applied for negotiated drugs.

  3. Beneficiaries: combine MFP with the $2,100 Part D out-of-pocket cap (2026). The cap is a hard maximum; the negotiated MFPs make hitting the cap less likely while still capping total cost.

  4. Beneficiaries: combine MFP with the $35 monthly insulin cap (effective January 1, 2023). For Fiasp/NovoLog and other insulins, both mechanisms apply.

  5. Beneficiaries: use GeorgiaCares SHIP for Part D plan comparisons. Free counselors compare plans during Annual Enrollment Period (Oct 15 - Dec 7) and Open Enrollment for MA (Jan 1 - Mar 31).

  6. Prescribers: continue evidence-based prescribing. Negotiated drugs being lower-priced does not change clinical decision-making — clinical appropriateness comes first.

  7. Prescribers: document medical necessity for negotiated drugs. Same standards as before; no change to prior authorization or step therapy criteria.

  8. Pharmacies: configure POS systems to apply MFPs at the point of sale. Effective January 1, 2026, claims for negotiated drugs adjudicate to MFP-based Negotiated Prices.

  9. Pharmacies: maintain accurate NDC reporting. MFP adjudication depends on accurate NDC matching.

  10. Part D plan sponsors: complete formulary configuration timely. Negotiated drug placement, tier assignment, and cost-sharing must align with MFP-based pricing.

  11. 340B covered entities: coordinate negotiated drug economics with 340B. Some negotiated drugs may also be 340B-eligible at the covered entity acquisition layer; ensure duplicate discount management.

  12. Manufacturers: comply with MFP at the dispensing pharmacy level. Civil monetary penalties up to 95% of sales for non-compliance.

  13. State Medicaid agencies: confirm Best Price exclusion is honored. Manufacturer Best Price reporting must reflect Section 1191(c) exclusion of MFP.

  14. Healthcare systems: track operational metrics on negotiated drugs. Volume, prescribing patterns, and patient cost-sharing trends inform population health and care management.

Common issues and how to avoid them

  1. Pharmacy POS adjudication errors. Configuration errors at January 1, 2026 transition could cause incorrect cost-sharing calculations. Prevention: pharmacies and plans validate systems pre-effective-date.

  2. Plan formulary placement of negotiated drugs. Some plans may place negotiated drugs in unfavorable tiers despite the MFP. Beneficiaries should compare plans annually.

  3. Patient confusion about cost-sharing. Beneficiaries may not understand the difference between the MFP, the Negotiated Price, and their coinsurance. SHIP counseling helps.

  4. Provider confusion about prior authorization. Negotiated drugs do not automatically eliminate PA requirements. Same clinical PA criteria apply.

  5. Dual-eligible coordination. Dual-eligibles with full Extra Help already pay very low cost-sharing; MFP impact is primarily at the program (not beneficiary) level for full LIS members.

  6. 340B duplicate discount management for negotiated drugs. 340B covered entities must manage interaction between 340B ceiling price (AMP - URA) and MFP.

  7. Manufacturer reporting compliance. Manufacturers must accurately report sales subject to MFP. Penalties for non-compliance.

  8. Part B coordination (future cycles). When Part B drugs become negotiated in 2028, ASP + 6% coordination becomes complex.

  9. Litigation outcomes uncertainty. Manufacturer challenges remain. Pharmacies and plans should prepare for various scenarios but proceed on current law.

  10. Specialty pharmacy adjudication for biologics. Negotiated biologics (Enbrel, Imbruvica, Stelara) typically go through specialty pharmacy networks. Specialty pharmacy adjudication must apply MFP.

  11. Patient communication about price drops. Beneficiaries may be confused if they paid one cost in 2025 and a different (lower) cost in 2026. Pharmacy and plan member communications help.

  12. Therapeutic substitution pressure. Plans may attempt to steer beneficiaries away from negotiated drugs if non-negotiated alternatives offer favorable rebate economics. Beneficiaries should ask about clinical equivalence.

  13. Insulin coordination. The $35/month insulin cap (2023) and Fiasp/NovoLog MFP both apply; pharmacy systems must coordinate.

  14. MA-PD plan benefit design. MA-PD plans may structure benefits differently than standalone Part D plans. Compare carefully.

Worked examples

Example 1: Fulton County — 70-year-old Atlanta Eliquis for atrial fibrillation

Mr. Williams is a 70-year-old retired Atlanta accountant with atrial fibrillation. He takes Eliquis (apixaban) 5 mg twice daily for stroke prevention — a Part D drug prescribed by his cardiologist at Emory Healthcare.

Before January 1, 2026, Eliquis's 2023 list price was approximately $521 per 30-day supply. Mr. Williams's Part D plan negotiated discounts brought his cost-sharing to approximately $100 per month after his deductible was met.

Effective January 1, 2026, Eliquis is subject to the negotiated MFP of $231 per 30-day supply — approximately 56% below the 2023 list price. Mr. Williams's cost-sharing is now based on the lower Negotiated Price. His monthly coinsurance has decreased substantially. Combined with the $2,100 Part D out-of-pocket cap, his total annual drug costs are now significantly lower than prior years.

Example 2: DeKalb County — 75-year-old DeKalb Jardiance for diabetes

Mrs. Johnson is 75, dual-eligible, and lives in DeKalb County. She has type 2 diabetes and heart failure with preserved ejection fraction. Her endocrinologist at Emory Decatur Hospital prescribes Jardiance (empagliflozin) 10 mg daily.

As a dual-eligible with full Extra Help, Mrs. Johnson pays a low fixed copay for Jardiance regardless of list price. However, her Part D plan and Medicare program benefit from the negotiated MFP for Jardiance ($197 per 30-day supply, approximately 66% below 2023 list price). The savings reduce Part D program costs, which over time supports lower premiums and broader plan options.

For Mrs. Johnson personally, the MFP is invisible at the pharmacy counter — she pays her LIS copay. For the federal Medicare program and her Part D plan sponsor, the MFP is a substantial savings driver.

Example 3: Cobb County — 68-year-old Cobb Xarelto post-PE prophylaxis

Mrs. Rodriguez is 68 and was hospitalized in 2025 at Wellstar Kennestone for a pulmonary embolism. She was discharged on Xarelto (rivaroxaban) 20 mg daily for long-term anticoagulation.

Effective January 1, 2026, Xarelto's MFP of $197 per 30-day supply (approximately 62% below 2023 list price) applies. Mrs. Rodriguez's Part D plan adjudicates Xarelto claims at the MFP-based Negotiated Price. Her coinsurance is reduced compared to 2025. Combined with the $2,100 Part D out-of-pocket cap, she has predictable, manageable anticoagulation costs.

Example 4: Worth County — 72-year-old Phoebe Putney Entresto for heart failure

Mr. Davis is 72, lives in Worth County in rural southwest Georgia, and has heart failure with reduced ejection fraction. His cardiologist at Phoebe Putney Memorial Hospital in Albany prescribes Entresto (sacubitril/valsartan) 49/51 mg twice daily.

Before January 1, 2026, Entresto's 2023 list price was approximately $628 per 30-day supply. Mr. Davis's Part D plan coinsurance was a significant burden — he sometimes skipped doses to make his medication budget last.

Effective January 1, 2026, Entresto's MFP of $295 per 30-day supply (approximately 53% below 2023 list price) is in effect. Mr. Davis's coinsurance is dramatically reduced. Combined with patient assistance from the Patient Advocate Foundation and the $2,100 OOP cap, he can now consistently afford his heart failure medication — which improves adherence and reduces hospitalization risk.

Example 5: Bibb County — 80-year-old Bibb Stelara for psoriatic arthritis

Mrs. Thompson is 80, lives in Macon, and has severe psoriatic arthritis treated with Stelara (ustekinumab) — a biologic administered every 8 weeks. Her rheumatologist at Atrium Health Navicent manages her treatment.

Stelara has been one of the highest-cost Part D drugs for Mrs. Thompson — her annual cost-sharing routinely exceeded $5,000 before the $2,000 OOP cap took effect in 2025.

Effective January 1, 2026, Stelara's MFP applies (negotiated MFP of $4,695 per dose, approximately 66% below 2023 list price). Combined with the $2,100 Part D OOP cap, Mrs. Thompson's annual out-of-pocket cost for Stelara is capped at $2,100 across all her Part D drugs. The MFP also reduces Part D plan and Medicare program costs for her Stelara doses.

Example 6: Hall County — 67-year-old NGMC Imbruvica for CLL

Mr. Patel is 67, lives in Gainesville, and was diagnosed with chronic lymphocytic leukemia (CLL) in 2024. His oncologist at Northeast Georgia Medical Center prescribed Imbruvica (ibrutinib) — a daily oral targeted therapy.

Imbruvica's 2023 list price was approximately $14,934 per 30-day supply. Even with insurance, Mr. Patel's cost-sharing in the catastrophic phase plus the $2,000 OOP cap meant his annual drug spending was at the cap.

Effective January 1, 2026, Imbruvica's MFP of $9,319 per 30-day supply (approximately 38% below 2023 list price) is in effect. Mr. Patel's Part D plan, his D-SNP integrated care model, and the federal Medicare program benefit from the lower price. Mr. Patel's annual OOP is capped at $2,100. The MFP combined with the OOP cap makes Imbruvica financially sustainable for the long-term CLL treatment Mr. Patel needs.

Frequently Asked Questions

1. What is the Medicare Drug Price Negotiation Program? A program created by the Inflation Reduction Act of 2022 (Public Law 117-169, August 16, 2022) that gives Medicare statutory authority to negotiate prescription drug prices with manufacturers, establishing Maximum Fair Prices (MFPs) for selected drugs.

2. When did the program start? The IRA was signed August 16, 2022. CMS published implementing guidance June 30, 2023. The first cycle's ten drugs were selected August 2023. MFPs were announced August 15, 2024 and became effective January 1, 2026.

3. What are the ten first-cycle negotiated drugs? Eliquis, Jardiance, Xarelto, Januvia, Farxiga, Entresto, Enbrel, Imbruvica, Stelara, and Fiasp/NovoLog insulin.

4. When do the first cycle MFPs take effect? January 1, 2026 — they are in effect as of the date of this guide.

5. How much do the first cycle MFPs reduce prices? Discounts range from approximately 38% to 79% off 2023 list prices.

6. What about the second cycle? On January 17, 2025, CMS announced 15 Part D drugs for the second cycle. MFPs will be effective January 1, 2027.

7. When will Part B drugs be included? The third cycle (selected 2026, effective 2028) is the first cycle to include Part B drugs.

8. Who administers the program? CMS, specifically the Center for Medicare. The HHS Office of the General Counsel and DOJ Civil Division handle litigation.

9. How does the MFP affect what I pay at the pharmacy? Your Part D plan adjudicates claims for negotiated drugs at the MFP-based Negotiated Price. Your coinsurance is calculated on the lower price.

10. Does the MFP apply if I have Extra Help / LIS? Yes, the MFP applies, but your beneficiary cost-sharing is already capped at low LIS copay amounts. The MFP primarily reduces Part D plan and Medicare program costs.

11. Does the MFP apply to all Medicare beneficiaries? Yes, the MFP applies to all Medicare-eligible individuals taking the negotiated drug, regardless of plan or LIS status.

12. Does the MFP affect Medicaid drug pricing? No. Section 1191(c) excludes the MFP from Medicaid Drug Rebate Program Best Price calculations, preventing a Medicaid cascade.

13. Why did Section 1191(c) exclude MFP from Medicaid Best Price? Without the exclusion, the MFP would become the manufacturer's lowest single-purchaser price, triggering massive Medicaid rebate increases. Section 1191(c) prevents that cascade.

14. Will negotiated drug prices increase over time? The MFP adjusts annually based on inflation (CPI-U) and other statutory factors. The negotiation is renegotiable every 1-3 years depending on drug status.

15. What happens if a manufacturer refuses to negotiate? Civil monetary penalties up to 95% of sales (Section 1197) and an excise tax under Section 5000D of the Internal Revenue Code. The penalties are designed to be punitive enough to ensure participation.

16. Have manufacturers sued to stop the program? Yes. Merck, BMS, AstraZeneca, Boehringer Ingelheim, Novartis, Novo Nordisk, PhRMA, NICA, and the U.S. Chamber have all filed challenges. Through May 2026, the challenges have largely failed.

17. Why isn't my drug on the list? The first cycle selected only 10 drugs from a much larger universe. Selection criteria favor highest-spend single-source brand drugs without generic/biosimilar competition. Many drugs do not meet these criteria yet.

18. Will more drugs be added? Yes. Second cycle adds 15 Part D drugs (effective 2027), third cycle adds 15 Part B + D drugs (effective 2028), fourth cycle adds 20 (effective 2029), and subsequent cycles add 20 annually.

19. How do I see the MFP for a drug? CMS publishes MFPs at cms.gov/inflation-reduction-act-and-medicare/medicare-drug-price-negotiation. Pharmacies can also display the Negotiated Price for negotiated drugs.

20. Do I need to do anything as a beneficiary? For most beneficiaries, no — your Part D plan, MA-PD plan, and pharmacy handle the MFP adjudication automatically. Compare plans annually during AEP (Oct 15 - Dec 7) to ensure your plan covers your drugs at favorable cost-sharing.

21. Does my Part D plan have to cover negotiated drugs? Generally yes for Part D plans. Plans cannot exclude negotiated drugs through formulary design alone; the IRA includes formulary inclusion provisions.

22. How does the MFP interact with the $2,000/$2,100 OOP cap? The MFP reduces the cost-sharing per drug; the OOP cap limits total annual out-of-pocket spending. Together, they dramatically reduce Part D financial exposure for seniors.

23. Does the MFP apply to insulin? Yes. Fiasp/NovoLog (insulin aspart) is on the first cycle list. Other insulins benefit from the $35/month copay cap that took effect January 1, 2023.

24. What is the Best Price exclusion's effect on Georgia Medicaid? The MFP is not Medicaid Best Price. Georgia Medicaid continues to receive its normal MDRP rebate (greater of 23.1% AMP or AMP - Best Price, plus inflation) for the same drugs.

25. Where do I learn more? CMS at cms.gov/inflation-reduction-act-and-medicare/medicare-drug-price-negotiation, GeorgiaCares SHIP (1-866-552-4464), Medicare Rights Center (1-800-333-4114), and your Part D plan member services.

Call to action — Georgia Medicare drug price negotiation resources

If you, a family member, or someone you care for takes one of the negotiated drugs — or has any questions about Part D pricing for 2026 — the contacts below can help.

  • Medicare: 1-800-MEDICARE (1-800-633-4227)
  • CMS Drug Price Negotiation Program: cms.gov/inflation-reduction-act-and-medicare/medicare-drug-price-negotiation
  • GeorgiaCares (Georgia SHIP): 1-866-552-4464 — free Part D plan counseling
  • Medicare Rights Center: 1-800-333-4114
  • Patient Advocate Foundation: 1-800-532-5274
  • NeedyMeds: 1-800-503-6897
  • Georgia DCH Member Services: 1-866-211-0950
  • Magellan Medicaid Administration Georgia: 1-800-424-9760
  • Atlanta Legal Aid: 404-377-0701
  • Georgia Legal Services Program: 1-800-498-9469
  • Eldercare Locator: 1-800-677-1116
  • 211 Georgia: dial 211
  • Social Security Administration: 1-800-772-1213
  • Acentra Health (Georgia Medicare QIO): 1-844-455-8708
  • Humana Member Services: 1-800-457-4708
  • UnitedHealthcare Medicare: 1-800-721-0627
  • Aetna Medicare: 1-800-282-5366
  • American Cancer Society: 1-800-227-2345
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Brevy Care Team

Expert eldercare guidance from Brevy's team of healthcare professionals and researchers.