Selected drugs, therapeutic alternatives, and price benchmarks for IPAY 2027 Medicare drug price negotiation.

Abstract

Background: On or before November 1, 2025, the Centers for Medicare & Medicaid Services (CMS) will report the agreed-upon negotiated prices (maximum fair prices [MFPs]) for the second round of up to 15 Medicare Part D drugs selected for price negotiation (Initial Price Applicability Year 2027).

Objective: To propose guideline-recommended therapeutic alternatives and estimate price benchmarks that may be considered by CMS for negotiation.

Methods: We identified US Food and Drug Administration (FDA)-approved indications for the 15 drugs selected for negotiation. We used 2022 Medicare claims data to identify drug-specific beneficiary utilization. Medical claims with International Classification of Diseases, Tenth Revision, Clinical Modification diagnosis codes for each indication were evaluated to estimate relative indication-specific utilization. We examined published clinical guidelines to identify and propose therapeutic alternatives for each drug and the most prevalent, FDA-approved indication. For negotiation price benchmarks, we report (1) the list price, (2) the estimated net price after manufacturer discounts, (3) the minimum statutory discount, and (4) the ceiling of the MFP. All price benchmarks were estimated at the product level, for a 30-day equivalent dosing, using Medicare Part D dashboard and IQVIA data. We also estimated net prices for the proposed therapeutic alternatives.

Results: Four drugs were identified to have 1 (deutetrabenazine, linaclotide, and nintedanib-esylate) or no (rifaximin) therapeutic alternative. Eight of the 15 selected drugs will have the ceiling price set by the minimum statutory discount. Four products (acalabrutinib, semaglutide, linagliptin, and sitagliptin/metformin) will include therapeutic alternatives and MFPs from the first round of negotiation. The selection of therapeutic alternatives and estimation of price benchmarks by CMS will set the initial conditions for subsequent price negotiation.

Conclusions: These analyses identify the likely ceiling price and various initial price offer scenarios for the second round of Medicare price negotiation. We report price benchmarks and likely therapeutic alternatives to improve transparency around the opaque CMS negotiation process.