Allowable for the first time due to the Inflation Reduction Act, the Centers for Medicare & Medicaid Services (CMS) has recently completed the first cycle of prescription drug price negotiations with primary manufacturers. CMS recently reported that the first 10 newly negotiated drug price reductions that are effective 2026 ranged from 38% to 79%.
To reach these new pricing agreements, CMS extended an initial offer for each high-cost drug identified for negotiation. Primary manufacturers responded with counteroffers prior to meeting with CMS to negotiate. Importantly, primary manufacturers had an opportunity to submit data and evidence on selected drugs.
So what evidence was allowable in negotiations?
- Research and development costs
- Prior financial support from the federal government
- Production costs per unit
- Distribution costs per unit
- Market/revenue/sales data
- Patent information
- FDA exclusivities, applications, and approvals
- Evidence about other therapeutic agents and other treatments, including comparative effectivness and unmet need/burden
Ki Park, Vice President for Market Access Strategy and Analytics at Genesis Research Group, explains how data analytics can help.
In response to the publication of maximum fair pricing, it’s important that manufacturers with products on and off the lists are preparing to do thorough analysis on the implications on their brands performance, by understanding how formulary positioning may impact brand access and overall utilization for their product. Manufacturers should be preparing for discussions with payers by understanding the current patient and payer landscape within their therapeutic area, how the negotiation landscape has changed in the therapeutic areas that have a product involved in price negotiations and if there are any impacts on adjacent markets. By leveraging the data assets available for comparative effectiveness research and market analytics, including CMS Medicare Claims data, Genesis Research Group can provide deep insights and real-world evidence. Moreover, with primary market research available through RPR, we can better equip primary manufacturers to navigate the challenges brought by the Medicare price negotiations for years to come.
CMS has released its guidance for 2025 negotiations for drug price agreements effective 2027. CMS will evaluate evidence regarding alternative treatments to a selected drug. This includes assessing whether the drug offers a therapeutic efficacy or safety benefit compared to existing alternatives and the associated costs. It also involves reviewing FDA-approved prescribing information for both the selected drug and its alternatives. Additionally, the comparative effectiveness of the drug is considered, focusing on their impact on specific populations, such as individuals with disabilities. Lastly, CMS examines how well the selected drug, and its alternatives, address unmet medical needs for conditions inadequately treated by current therapies.
The data analytics team at Genesis Research Group supports primary manufacturers impacted by price negotiations with comparative effectiveness research.
Though the price negotiations are new, and impacting clients in unprecedented ways, the methods of understanding payer controls and the impact on patient access and utilization are well-established. We are applying our data analytics to the forefront of value discussions. By leveraging the vast data assets available to Genesis, coupled with our market access experts in analytics and primary market research, Genesis Research Group is your partner of choice to provide analytics, strategic guidance, and actionable recommendations through these uncharted waters ahead.
Ask Ki Park a question on this topic or arrange a meeting
Ki Park is the Vice President for Market Access Strategy and Analytics at Genesis Research Group. Ki has over 25 years of experience in the pharmaceutical industry ranging from sales to strategy consulting and analytics. He started his career at Merck as a field sales rep and soon transitioned to Allergan where he led a market research team supporting the market access team, where he provided insights around areas of contracting, payer pull-through, and Medicare Part D readiness. He transitioned to the consulting side to Symphony Health Solutions where he was the VP of Payer and Patient Analytics, leading a team of principals and consultants focusing on consulting and analytic engagements leveraging the vast data assets available commercially in the U.S. Most recently, he was at IQVIA on the Market Access Strategy Consulting and Analytics team where he continued to provide consulting and analytic solutions for his clients in the U.S. Market Access space. Ki earned a bachelor’s degree in biology at UC Irvine and a master’s degree in business administration at the University of Southern California.
