Inside CMS’s Drug Pricing Playbook: What it Means for IPAY 2028 and Subsequent Rounds

Round Three and Counting: How We Got Here 

The third cycle of the Medicare Drug Price Negotiation Program is underway, with manufacturers of selected drugs awaiting initial offers over the coming month. The Negotiation Program, established by the Inflation Reduction Act (IRA) of 2022, authorizes the federal government to directly negotiate prices for select high-expenditure drugs covered under Medicare. The ensuing negotiations result in binding Maximum Fair Prices (MFPs) that manufacturers must honor for Medicare beneficiaries. The U.S. Centers for Medicare & Medicaid Services (CMS) annually selects drugs for negotiation with high total Medicare expenditures; no approved and marketed generic or biosimilar competition; and sufficient time since U.S. Food and Drug Administration (FDA) approval: at least seven years for small-molecule drugs and 11 years for biologics. Eligible drugs are ranked by spend and the highest-ranked drugs are selected, subject to statutory exclusions. 

CMS selected ten drugs for the first negotiation cycle (IPAY 2026), 15 for IPAY 2027, and 15 for IPAY 2028; later this year, the agency is projected to select 20 drugs for IPAY 2029. Beginning with IPAY 2028, selected drugs may be covered under Part D and/or payable under Part B. While participation in the program is technically optional, non-participation triggers a steep excise tax on U.S. sales; as a result, all selected manufacturers have chosen to participate in every cycle to date. Participating manufacturers must submit proprietary data and clinical evidence on their drug, which CMS uses to develop a list of therapeutic alternatives to the selected drug. The adjusted weighted average price of these therapeutic alternatives will determine the initial offer. 

Manufacturers may respond to the initial offer with an acceptance or counteroffer, then participate in up to three negotiation meetings with CMS before an agreement is reached and a final MFP is published. Other stakeholders, including patients, patient advocates, clinicians, researchers, and other manufacturers, may submit data on therapeutic alternatives and clinical considerations for each selected drug through formal comment processes and are invited to share their experiences with the selected drugs at public engagement events hosted by CMS; they inform but do not determine the MFPs. At the end of the process, to promote transparency, CMS publishes MFP Explanations for all drugs describing the key factors that drove its offers and the negotiation exchanges. While some details are redacted, these explanations are the primary public window into how MFPs are established. 

After two completed cycles and 25 drugs, the Medicare Drug Price Negotiation Program has produced enough public record for us to identify patterns in how CMS has set prices. Clear trends have emerged in therapeutic alternative selection, clinical evidence framing, and negotiation team composition. Manatt has completed a comprehensive analysis of this record and is providing clients with detailed insights on how these trends could shape current and future rounds. Below is a brief preview of some of our findings. 

Seven Things to Know Before IPAY 2028 Negotiations 

1. CMS draws comparators from outside of therapeutic class. In IPAY 2027, CMS pushed comparators across mechanism-of-action and class boundaries. Manufacturers cannot assume that CMS will limit comparators to pharmacologically similar drugs.

2. Drugs being selected are transitioning from those with large patient populations to those with smaller populations and higher prices. IPAY 2026 captured the 10 highest-spend Part D drugs, representing a total of $56.2 billion of Part D spending in 2023. The IPAY 2027 selected drugs dropped to roughly $42.5 billion in Part D spending across 15 drugs. IPAY 2028 dropped to roughly $27 billion across the 15 newly selected drugs, which – for the first time – spanned Part B and Part D. The share of selected drugs costing more than $10,000 per patient per year rose from 30 percent in IPAY 2026 to 67 percent in IPAY 2028.  

3. “There is no therapeutic alternative” is not a winning argument. Three manufacturers claimed in their submissions to CMS that no true comparator existed for their drug: one paired this argument with a conditional fallback list, while the other two offered nothing. CMS rejected all three of these proposals and produced an extensive comparator list of its own for each drug. Manufacturers heading into IPAY 2028 negotiations should expect CMS to develop a broad comparator set whether one is offered or not. 

4. CMS selects a broader set of clinical outcomes of interest, with selection varying meaningfully by therapeutic area. In general, CMS looks to a broader set of relevant clinical outcome measures than those proposed by manufacturers. CMS uses these measures to evaluate the clinical comparative effectiveness of each selected drug. Oncology drugs generally receive the most standardized treatment, while autoimmune and rheumatologic drugs have the most varied outcome sets.  

5. CMS staffs negotiations from a small core team. Within a therapeutic class, CMS staff overlap across negotiation meetings (three per drug) reached 86 to 100 percent in both IPAY 2026 and IPAY 2027. Manufacturers can reasonably expect the CMS team negotiating the price of their drug to include those who negotiated their competitors in the same class. 

6. Manufacturer teams have settled on a template. Market Access, Legal, Health Economics and Outcomes Research (HEOR), and Government Affairs dominate manufacturer delegations at negotiation meetings. The original six-person attendance cap shaped manufacturers’ decisions on the function and seniority level of negotiation meeting attendees. CMS raised the cap to eight per side beginning with IPAY 2028, which may broaden the title mix, but the core functions seem unlikely to be displaced. 

7. Public engagement changed shape between cycles. IPAY 2026 relied on one-way listening sessions: three-minute speaker statements with no dialogue. IPAY 2027 introduced moderated drug-specific roundtables and cross-drug town halls with follow-up questions. The format change altered who speaks and how clinical evidence enters the record. Across both years, advocacy organization representatives, patients, and providers comprised the largest shares of speakers at public engagement events. 

What is In the Full Report 

The full report is a written analysis covering four core areas: 

• Therapeutic Alternatives: Cross-cycle therapeutic alternative selection patterns, and where CMS and manufacturers agree and where they diverge. 
• Outcomes Selection: Which types of clinical and patient-centered outcomes CMS prioritizes by therapeutic area, and which types of outcomes manufacturers have proposed but CMS has not prioritized. 
• Negotiation Team Composition: Full analysis of negotiation meeting attendance covering both CMS and manufacturer sides: functional roles, seniority tiers, and meeting-to-meeting evolution. 
• Public Engagement: Speaker tally across all 25 drug-specific events, format-change implications, and advocacy organization participation patterns. 

Contact your Manatt Health team to access the full report.