Spring has nearly sprung, and round two of the Inflation Reduction Act's (IRA's) negotiation period has begun. Each of the drugmakers that make the fifteen medicines selected for 2027 price cuts have officially signed on to the process, giving the go-ahead for the price talks to begin.
Now that the required agreements have been signed, the Centers for Medicare & Medicaid Services (CMS) will spend the next few months collecting input from patients, clinicians and other “interested parties” before floating its initial maximum fair price offer no later than June 1, the agency announced in a statement.
After that, companies will have 30 days to accept or submit a counteroffer. CMS will offer the companies a total of three negotiation meetings before the negotiation period ends Nov. 1.
The 15 medicines included in this round of the price talks accounted for about $41 billion in Medicare Part D gross spending between November 2023 and October 2024, according to CMS.
The list includes Novo Nordisk’s semaglutide franchise Ozempic, Rybelsus and Wegovy, Pfizer’s Ibrance and Bristol Myers Squibb’s Pomalyst, among other blockbuster drugs.
Last year’s pricing talks were in full swing by early March, when each company involved had already responded to the government’s Feb. 1 pricing offer with a counteroffer. The first cycle of negotiations impacted 10 drugs with price cuts that will take effect in 2026.
A handful of the drugs up for the second round of price cuts are made by companies that also participated in the first go around. The process resulted in substantial price reductions, including up to 76% for Novo Nordisk's Fiasp, for the affected drugs.
While last year’s crop of drugmakers ultimately agreed to the new prices, they certainly weren’t happy about it. Novartis said in a statement that it only acceded to a 53% price cut on its Entresto to “avoid other untenable options,” while Bristol Myers Squibb noted that the 53% price reduction to its Eliquis “does not reflect the substantial clinical and economic value of this essential medicine.”
Many of the impacted companies have challenged the IRA in court, specifically taking issue with the “voluntary” aspect of the pricing measures that requires companies to sign on to the negotiations or leave the federal healthcare programs altogether. So far, the industry’s arguments against the price mandates have largely fallen flat in the courts.
Still, a new administration at the helm of the federal government has sparked a bit of new hope that the IRA could be due for some changes. Industry trade group the Pharmaceutical Research and Manufacturers of America (PhRMA) wants the Trump administration to fix IRA’s “pill penalty” and reverse the “bureaucratic overreach” it perceived in the bill, the organization said in its 2025 policy agenda.