ASSESSMENT OF IPAY 2027 MEDICARE DRUG PRICE NEGOTIATION MAXIMUM FAIR PRICESWITH PRICES IN MOST FAVORED NATION REFERENCE COUNTRIES
Author(s)
Emma Cousin, PharmD1, Nico Gabriel, MSc2, Kevin H. Li, MS, PharmD1, Kristi Martin, MA, MPP3, Jens Grueger, PhD4, Sean D. Sullivan, PhD5;
1University of Washington School of Pharmacy, Seattle, WA, USA, 2University of California, San Diego, San Diego, CA, USA, 3Camber Collective, Washington, DC, USA, 4CHOICE Institute, University of Washington, Seattle, WA, USA, 5University of Washington, Professor, Seattle, WA, USA
1University of Washington School of Pharmacy, Seattle, WA, USA, 2University of California, San Diego, San Diego, CA, USA, 3Camber Collective, Washington, DC, USA, 4CHOICE Institute, University of Washington, Seattle, WA, USA, 5University of Washington, Professor, Seattle, WA, USA
OBJECTIVES: Branded prescription drug prices in the United States (US) substantially exceed those in peer nations. The Inflation Reduction Act (IRA) authorized Medicare to negotiate prices for high-expenditure drugs, resulting in Maximum Fair Prices (MFPs) for 15 Part D products effective in 2027. More recently, the Centers for Medicaid and Medicare Services (CMS) introduced the GENEROUS, GLOBE, and GUARD models, which establish a Most-Favored Nation (MFN) pricing framework tied to international prices and vary in number of reference countries. The objective is to evaluate the performance of the Medicare Drug Price Negotiation Program by comparing negotiated prices with domestic and international price benchmarks.
METHODS: We identified negotiated drugs using CMS publications, estimated pre-negotiation US net prices, and CMS price benchmarks for negotiation including statutory discounts. International list prices from nineteen high-income countries were extracted from Eversana’s NAVLIN database and converted to USD using 2025 exchange rates. All prices were standardized to 30-day equivalent supply following CMS methods. For drugs with multiple brands or strengths, weighted average per-unit prices were estimated using Medicare Part D utilization data.
RESULTS: Post-negotiation MFPs were 15% to 60% lower than estimated net prices with greater reductions for drugs whose ceiling price was determined by the net price. Twelve drugs had MFPs below their estimated ceilings. Discounts varied by therapeutic class and were larger for drugs with prior Medicare negotiated comparators. MFPs remained substantially higher than the average published list price in the 19 MFN reference countries in the proposed GLOBE and GUARD models and the 8 countries in the GENEROUS model.
CONCLUSIONS: The 2027 Medicare drug negotiations generated meaningful reductions in domestic drug prices but left substantial disparities relative to peer nations. Upcoming MFN-based pricing models may exert further downward pressure, though their implementation and international effects warrant careful monitoring.
METHODS: We identified negotiated drugs using CMS publications, estimated pre-negotiation US net prices, and CMS price benchmarks for negotiation including statutory discounts. International list prices from nineteen high-income countries were extracted from Eversana’s NAVLIN database and converted to USD using 2025 exchange rates. All prices were standardized to 30-day equivalent supply following CMS methods. For drugs with multiple brands or strengths, weighted average per-unit prices were estimated using Medicare Part D utilization data.
RESULTS: Post-negotiation MFPs were 15% to 60% lower than estimated net prices with greater reductions for drugs whose ceiling price was determined by the net price. Twelve drugs had MFPs below their estimated ceilings. Discounts varied by therapeutic class and were larger for drugs with prior Medicare negotiated comparators. MFPs remained substantially higher than the average published list price in the 19 MFN reference countries in the proposed GLOBE and GUARD models and the 8 countries in the GENEROUS model.
CONCLUSIONS: The 2027 Medicare drug negotiations generated meaningful reductions in domestic drug prices but left substantial disparities relative to peer nations. Upcoming MFN-based pricing models may exert further downward pressure, though their implementation and international effects warrant careful monitoring.
Conference/Value in Health Info
2026-05, ISPOR 2026, Philadelphia, PA, USA
Value in Health, Volume 29, Issue S6
Code
HPR57
Topic
Health Policy & Regulatory
Topic Subcategory
Pricing Policy & Schemes
Disease
No Additional Disease & Conditions/Specialized Treatment Areas