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Asembia AXS25: Transformative Challenges for Pharmacists, Providers Ahead as IRA Drug Negotiations Go Into Effect
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Key Takeaways
- The IRA's Medicare Part B drug negotiations will transform the market, requiring stakeholder awareness and patient education to mitigate financial impacts.
- CMS will release draft guidance for price negotiations, with the first applicability year being 2028, affecting high-spending drugs without generic alternatives.
The Inflation Reduction Act's (IRAs) drug negotiation provisions will fundamentally reshape Medicare drug pricing, provider reimbursement, and healthcare delivery dynamics across Part B and commercial markets, according to panelists at Asembia’s AXS25 Summit.
Full implementation of the Inflation Reduction Act’s (IRA) changes to Medicare Part B drug negotiation powers necessitates proper education and counseling to ensure patients are not left behind financially in the course of their treatment, according to a panel discussion held during a business session titled “IRA Impact on Reimbursement, Access, and Distribution of Part B Drugs within Medicare and Beyond,” at Asembia’s AXS25 Summit, which takes place April 27 through May 1 in Las Vegas, Nevada.1
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Negotiations for Medicare Part B drugs mandated by the IRA stand to cause transformative changes to the market. Given the impending draft guidance expected to be released by the Centers for Medicare and Medicaid Services (CMS) that will outline key aspects of price negotiations for the initial price applicability year (IPAY) 2028—which will include Part B drugs for the first time—it is imperative for stakeholders in the industry to be aware of the implications, according to Milena Sullivan, practice director, Avalere Health.1
The panelists included Sullivan; Omar Hafez, senior vice president (SVP) and head of US market access, Avalere Health; Ramesh Srinivasan, SVP, strategic pricing and manufacturing relations, McKesson; and Bryan Nyquist, president and CEO, National Infusion Center Association.1
Preparation for Negotiation Process is Critical
Sullivan began the panel by explaining the basics of IRA drug price negotiations. She said the process targets high-spending drugs with no generic alternative or biosimilar competition. After analyzing different criteria and negotiating with actors, CMS will determine a maximum fair price (MFP) for which the rate at which Medicare pays separately payable drugs will shift from average sales price (ASP) plus 6% to MFP plus 6%. Sullivan explained that MFPs must be offered to all Medicare beneficiaries, including those in Medicare Advantage.1
Critically, beginning with IPAY 2028, CMS can select part B drugs based on their total Medicare spend, according to Sullivan. As the negotiation process for IPAY 2028 drugs begins in 2026, key decisions and guidance will be formulated in the coming weeks and months, marking a turning point for various stakeholders. According to Hafez, manufacturers have an essential responsibility in ensuring that the MFP is available to every patient who is Medicare eligible.1
“The onus is on the manufacturer to make sure that the MFP is accessible to every patient who is Medicare eligible,” Hafez explained. “It’s on the manufacturer to make sure every Medicare patient has access to that.” Pathways by which manufacturers can ensure proper patient access to MFPs include prospective methods, where reimbursement occurs at the point of scale, or a retrospective method during the reimbursement process.1
Although 2028 may seem like a long time away, Hafez cautioned stakeholders that, following the February 1, 2026, milestone where CMS will publish the list of negotiated drugs for IPAY 2028, manufacturers should be ready and prepared to submit evidence to CMS indicating adequate differentiation of their product from generics or biosimilars.1
Potential Impacts
The new ability to negotiate Medicare Part B drugs is poised to shift the financial risk to physicians. For IPAY 2028 and 2029, there will be around 5 to 7 drugs selected for price negotiations, with a high likelihood that these medications will carry already very high values and be in very selective areas such as oncology, immunology, and neurology, according to Srinivasan.1,2
“As we look at the impact on provider reimbursement, that is going to be an important indication as to how providers think about their practices and their viability,” Srinivasan said.1
Speaking from the perspective of providers, Nyquist said that these stakeholders were preparing for potentially lost revenue from drug payments. Nyquist explained that typically, in the medical benefit drug landscape, a professional service payment is followed by a drug payment, which is then partially reimbursed by Medicare. Pharmacy benefit managers have become reliant on drug payments to offset losses, meaning they rely on a select number of margin-positive products—those that could get wrapped up in part B negotiations.1
“We anticipate that, if any of those margin-positive products upon which genetic cost recovery relies on are negotiated with significant reductions in that drug, we’re going to see significant limitations across access to support those products,” Nyquist explained. “That has dire consequences.”1
Part B negotiations will clearly be a distinct process compared with Part D, and the expert panel took time to compare each process to inform pharmacists as to the differences between them. In part B, it is likely that MFPs will be significantly lower than current net prices, and there are challenges expected regarding identifying therapeutic alternatives and the complexity due to numerous introductions, off-label use, and weight-based dosing, according to Srinivasan. Furthermore, uncertainty abounds as to how CMS will calculate the 30-day supply and starting point for part B drugs.1
For manufacturers, “if everything happens as it is expected with negotiations, then you must start building out scenarios to understand what the different levels of impact would be,” Hafez explained. “You have to start thinking about how our stakeholders may start changing their behaviors.”1
Future Considerations
As stakeholders involved in the reimbursement and negotiation process prepare for changes, payers will need to prepare for significant loss in cost-effective capacity for negotiated products, which will lead to either preferencing of non-negotiated products or transitioning to treating patients in more expensive hospitals, Nyquist says.1
“They are going to pivot from proactive disease management to reactive disease flare management in the most expensive care settings,” Nyquist explained, listing out the possible detrimental impacts of part B negotiations on payers. Nyquist also discussed how he expected increased consolidation and forced vertical integration from providers as the only viable exit strategy.1
To end the session, the experts explained areas they are looking at as the future rapidly approaches and market and therapeutic dynamics continue to shape strategies. Hafez spoke to his interest in how CMS will treat follow-up products, while Sullivan pointed to the attitudes of the Trump administration towards drug negotiations as a point of interest.1
“We all know that access to care in local communities close to where patients live is the best care,” Srinivasan explains. “The question is, can we as an industry keep that going?”1
