(15) Payer Expectations for the Impact of MFP Pricing on Management and Profitability

Background: : Under the Inflation Reduction Act (IRA), the Maximum Fair Prices (MFPs) for the first 10 drugs selected under the Medicare Drug Price Negotiation Program will take effect in 2026. Medicare Part D plans must include these drugs on their formularies to ensure reasonable access. The Centers for Medicare & Medicaid Services will monitor plan practices to prevent actions that undermine negotiated drugs.

Objective: : Assess how Medicare plans are preparing for MFP implementation in 2026, including formulary strategies for high-cost categories like immunology and oncology, and anticipated impact on competitor products and plan profitability.

Methods: : Precision AQ conducted a March 2025 survey with 25 health plan decision-makers overseeing Medicare formularies. All were actively involved in 2026 formulary planning.

Results: : MFP drug inclusion is expected to reshape formulary positioning for competitor products. Forty percent of respondents anticipate disadvantaging drugs competing with MFP products, and 8% plan to remove at least one competitor from the formulary. A third expect no impact, and 20% will decide on a case-by-case basis. Nearly half (48%) of health plans intend to proactively move patients to or from therapies based on their MFP strategy.

With 2 immunologics on the negotiation list facing biosimilar competition, 56% of respondents said biosimilar and brand access will be determined by net cost, while 28% plan to cover both at parity, and 12% will prioritize rebate value. Within the oncology category, in light of the IRA provisions and potential for multiple negotiated drugs, respondents reported potentially using the following measures to control costs: 56% of health plans will use step therapy protocols, 48% will apply preferred tiering, and 36% will implement Part B/D step therapy. Overall, 36% expect a somewhat positive effect on profitability, 28% anticipate no impact, 32% predict a somewhat negative effect, and 4% expected a strongly negative outcome.

Looking to 2027, health plans expect to strengthen their focus on biosimilars (84%) and generics (68%). Forty percent plan to reduce brand coverage, and 28% will expand step edits.

Conclusions: : MFP pricing is expected to intensify pressure on competitor drugs, particularly in classes with negotiated drugs and/or biosimilar alternatives. While profitability expectations remain mixed, health plans are clearly preparing for a more cost-conscious future. Heading into 2027, many are likely to pursue low wholesale acquisition cost strategies, increase scrutiny of drug value, and adopt more aggressive formulary management practices.

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