Impacted: All clients with Medicare busisness

What you need to know

The Centers for Medicare & Medicaid Services (CMS) has released the Inflation Reduction Act (IRA) drug list for Initial Price Applicability Year (IPAY) 2028, identifying 15 drugs for negotiation and one drug for renegotiation. These therapies represent a significant share of Medicare spending and include both Part D and, for the first time, physician‑administered (PADs) Part B drugs.

Negotiations with manufacturers will occur in 2026, and any negotiated Maximum Fair Prices (MFPs) would take effect beginning Jan. 1, 2028. There is no immediate impact to clients or beneficiaries as a result of this announcement.

CMS has issued Final Guidance for IPAY 2028 cycle outlining the requirements and parameters for the negotiation process; however, additional sub-regulatory guidance will be needed to address implementation details, particularly for Part B drugs. Prime is actively monitoring CMS guidance and will assess implications as further clarity becomes available.

Overview

Under the IRA, CMS is mandated to negotiate prices for select high-expenditure Medicare drugs to lower gross costs for beneficiaries and the program overall.

For the Initial Price Applicability Year (IPAY) 2028, the list features therapies that are widely prescribed for serious and chronic conditions, including those in oncology, immunology, endocrinology, rheumatology and more. Notably, this is the first time that PADs payable under Medicare Part B are included in the negotiation process, expanding the scope beyond just prescription drugs covered under Part D. 

Drugs selected for negotiation include: 
Anoro Ellipta, Biktarvy, Botox/Botox Cosmetic, Cimzia, Cosentyx, Entyvio, Erleada, Kisqali, Lenvima, Orencia, Rexulti, Trulicity, Verzenio, Xeljanz/Xeljanz XR, Xolair and Tradjenta (renegotiation).

What this may mean for clients 

• Once the MFPs take effect in 2028, there may be a reduction in overall Medicare drug spending, accompanied by changes to reimbursement for PAD Part B drugs.
• Possible shifts in formulary or utilization management depending on negotiated pricing outcomes.
• Benefit design implications, pending CMS operational guidance on applying MFPs.

Note: Nov. 30, 2026, is the deadline for CMS to publish any agreed-upon MFPs resulting from the third cycle of negotiations and renegotiation.

What Prime is doing

Prime is closely tracking CMS implementation of the IRA drug pricing negotiation program and monitoring upcoming guidance related to IPAY 2028. As new details become available, Prime will assess the potential impacts and share timely updates, including findings from impact modeling once MFPs and operational instructions are released.

Questions

Reach out to your Prime account team representative.