Ten drugs. Fifteen more. Then fifteen after that. Forty products now sit inside Medicare's Drug Price Negotiation Program, and the pattern in CMS's own selection lists is not the one most coverage led with. Six manufacturers — AbbVie, Boehringer Ingelheim, Bristol-Myers Squibb, GlaxoSmithKline, Janssen, and Novartis — each placed exactly three drugs on the combined 2026–2028 lists, out of 40 total products from 22 manufacturers. That concentration is not random: it is a direct readout of which companies built the largest Part D-reimbursed franchises in chronic disease (diabetes, cardiovascular, autoimmune) before the Inflation Reduction Act's eligibility clock started running.
The mechanism: how a drug lands on the list
Section 1194 of the IRA lets CMS select drugs for negotiation once they have been FDA-approved for at least 7 years (small-molecule) or 11 years (biologics) with no generic or biosimilar competition, ranked by total Medicare Part D (and, starting cycle 3, Part B) spending. CMS's own published selections show 35 of 40 selected products are Part D-only, 4 are dual Part B/D (Orencia, Cosentyx, Entyvio, Xolair), and 1 is Part B-only (Botox) — confirming the program is still overwhelmingly a retail-pharmacy-benefit exercise, not a physician-administered-drug one, even as cycle 3 pulled in its first wave of injectable biologics.
Once selected, CMS and the manufacturer negotiate a Maximum Fair Price (MFP) — a ceiling on what Medicare pays, capped by statute at 40-75% below list price depending on how long the drug has been on the market. The first 10 MFPs, covering cycle-1 drugs like Eliquis, Jardiance, and Xarelto, were published by CMS in August 2024 and took effect January 1, 2026[1]. CMS reported average negotiated discounts across that first batch, with Eliquis's MFP set at $231 for a 30-day supply versus a $521 2023 list price, a 56% reduction[1].
What the three-cycle cadence looks like
What changes for manufacturers and PBMs
For manufacturers, the MFP effectively becomes the new floor for Medicare net price, collapsing the rebate-and-spread economics PBMs historically negotiated on top of list price. Novo Nordisk's inclusion of semaglutide (Ozempic) in cycle 2 is the clearest signal yet that GLP-1s — the highest-growth category in Part D — are now squarely inside the program's reach, with an MFP effective January 2027[2]. For PBMs, an MFP that applies uniformly at the point of sale removes much of the rebate-based leverage that determined formulary placement; several PBMs have already begun restructuring GLP-1 formulary contracts ahead of that transition[3].
Caveats: this index reflects CMS's own published selection lists as of each cycle's announcement date, not final negotiated MFP dollar figures for cycles 2-3 (those publish later per statute), and it does not capture state Medicaid best-price interactions or 340B ceiling-price effects. Multiple manufacturers, including Boehringer Ingelheim and Bristol-Myers Squibb, sued to challenge the program's constitutionality; the Supreme Court declined to hear those appeals in May 2026, leaving the program's legal footing intact for now[4].
Why this matters: cycle 4 selections (for IPAY 2029) are due by February 1, 2027, and CMS has signaled the list will keep expanding into Part B oncology and biologics. Manufacturers with concentrated Medicare exposure — the same six companies that already anchor cycles 1-3 — are the ones with the least room left to absorb further MFP-driven margin compression through 2028.