Medicare Drug Price Negotiation: Manufacturer Evidence, Negotiation Data Elements and How to Prepare

The Medicare Drug Price Negotiation Program was established by the Inflation Reduction Act of 2022. It gives the Centers for Medicare & Medicaid Services (CMS) the power to negotiate the price Medicare pays for certain high-spend drugs that have no generic or biosimilar competitor; the negotiated price is called the maximum fair price (MFP) ¹. Ten drugs have carried negotiated prices since 1 January 2026, fifteen more follow in 2027, and negotiations on a further fifteen are under way this year for prices that start in 2028 ². In June 2026 CMS proposed regulations for the rounds from 2029 onward ³. A manufacturer whose drug is selected has to send CMS its research and development, production, patent and sales data by 1 March. On the same date it can also send evidence on how the drug performs against the other treatments for the same condition. CMS uses both, together with its own literature review and public submissions, to set its first price offer by 1 June ^4,8.

1. The Program in Outline

Sections 11001 and 11002 of the Inflation Reduction Act added sections 1191 to 1198 to the Social Security Act ^1,4. Each year CMS publishes a list of selected drugs, signs an agreement with each manufacturer that chooses to take part, negotiates a price, publishes the agreed prices with an explanation, and enforces the program with civil monetary penalties ⁴. The MFP is the negotiated price, adjusted for inflation each year. It stays in force until a generic or biosimilar version of the drug is approved and on the market ⁴.

Drugs are selected by Medicare spending. CMS ranks the highest-spend single-source drugs under Part D and, from the third round, Part B, and selects from the top of the combined list ^2,5. The number selected was 10 in the first round, 15 in the second and third, and up to 20 in the fourth and every round after it ^3,5. A drug that already has an MFP can be selected again for renegotiation. Tradjenta was the first, in January 2026 ⁵.

2. Where the Program Stands in September 2026

Three points matter for planning. The third round is the first to include drugs paid under Part B, so physician-administered products are now in scope ⁵. All fifteen manufacturers signed agreements by the 28 February 2026 deadline ⁷. And the first three rounds have run under CMS guidance, as the law provided; from 2029 the program continues under regulations, which CMS proposed on 16 June 2026 with comments closing on 17 August and a final rule expected in fall 2026 ^3,9.

3. The Drugs Selected So Far

First round, prices from 2026 (10 Part D drugs). Eliquis, Jardiance, Xarelto, Januvia, Farxiga, Entresto, Enbrel, Imbruvica, Stelara, and NovoLog/Fiasp ¹².

Second round, prices from 2027 (15 Part D drugs). Every participating company responded to CMS's first offer with a counteroffer, and CMS held three negotiation meetings with each. Agreement was reached in the meetings or by written price exchange for eight drugs; for the other seven, the company accepted CMS's written final offer ⁶.

CMS estimates that, had these prices been in effect in 2024, net Medicare spending on the 15 drugs would have been about 44 percent lower ⁶.

Third round, prices from 2028 (15 Part B and Part D drugs plus one renegotiation). All 15 companies signed agreements by the 28 February 2026 deadline ⁷.

Botox, Cimzia, Orencia and Entyvio are the first drugs with mainly Part B use to be selected ^5,7. The fourth-round list, of up to 20 drugs, is due by 1 February 2027.

One consequence of the accumulating list matters for evidence planning: CMS has stated that when a drug with a negotiated price is identified as a therapeutic alternative to a drug selected in a later round, its negotiated price can serve as an input to the first offer for the newly selected drug ⁶. A manufacturer whose competitor already carries an MFP should expect that price, not the competitor's list price, to anchor the comparison.

4. Two Submissions on One Form

Section 1193(a)(4) of the Act requires a participating manufacturer to submit its non-federal average manufacturer price and any information CMS needs to run the program, including the manufacturer-specific data listed in section 1194(e)(1) ^4,9. For the third round these negotiation data elements were due through the CMS Health Plan Management System (HPMS) by 1 March 2026 ⁸. The submission is compulsory for every participating manufacturer and has to be updated if the numbers change during negotiation ⁹.

Section 1194(e)(2) lists the evidence CMS considers about the selected drug and its therapeutic alternatives, meaning the other treatments a patient could receive instead. The law does not say who supplies this evidence, so CMS collects it on the same form, in sections open to the manufacturer and to anyone else, on the same 1 March date ^8,9. This evidence is not a mandatory data element in the way the section 1194(e)(1) data are. It is nevertheless the manufacturer's main opportunity to put its own evidence and context before CMS ahead of the first offer, together with the spring meeting CMS holds with each manufacturer on its submission ^6,8. CMS weighs it alongside submissions from patients, clinicians, academics and other interested parties, its own literature review, the FDA labels, clinical guidelines, drug compendia and Medicare claims data ^6,8.

The two parts have different owners and different risks. The data part is a reconciliation job across finance, supply chain, legal and regulatory teams, in a program that CMS enforces with civil monetary penalties ⁴. The evidence part is a clinical and economic case for the drug's value, and the risk is a weak or late submission: CMS then builds its offer mainly from its own literature review and from what patient groups, clinicians and competitors submitted, and the manufacturer sees that picture for the first time in the offer on 1 June.

5. The Two Information Collection Requests

CMS collects program information through two packages approved by the Office of Management and Budget under the Paperwork Reduction Act, each called an information collection request (ICR) ⁹. The drug selection package (CMS-10844, OMB 0938-1443) is used before selection: a biosimilar maker uses it to request a delay in the selection of the reference drug, a manufacturer uses it to send information CMS may consider when deciding whether a previously negotiated drug is eligible for renegotiation, and a manufacturer uses it to ask whether its drug qualifies as a small biotech drug for the Temporary Floor ⁹. The negotiation package (CMS-10849, OMB 0938-1452) is used after selection: it carries the required manufacturer-specific data, the sections in which the manufacturer and any interested party submit evidence about the drug and its alternatives, and the form for a written counteroffer ⁹. Both packages were revised with the June 2026 proposed rule and are due to be finalized with it ⁹. An ICR sets out what CMS collects and how; the manufacturer's evidence package is what it fills the form with.

6. The Required Data: Negotiation Data Elements

Section 1194(e)(1) names five categories of manufacturer-specific information ⁴. The table shows each with the teams that usually hold the data.

The non-federal average manufacturer price required by section 1193(a)(4) is a sixth item, defined under the Veterans Health Care Act and supplied by the government pricing team ⁴.

The problem in this part is rarely a missing number. Each team keeps its own definitions, fiscal calendars and allocation rules, and CMS reads the submission as one document. A recovery figure built on gross revenue in one table and net revenue in another, or R&D spend that includes a licensor's costs in one round and excludes them in the next, is the kind of inconsistency that surfaces when CMS reviews the submission and asks for an update. Preparation here means a data inventory, a register of definitions and a log of every reconciliation decision, built before the selection announcement rather than after it.

7. The Evidence Submission: The Drug and Its Alternatives

Section 1194(e)(2) tells CMS to consider, for the selected drug and its therapeutic alternatives: whether the drug is a therapeutic advance over the alternatives, and what the alternatives cost; the FDA prescribing information; comparative effectiveness, including effects on specific groups such as people with disabilities, the elderly, the terminally ill, children and other patient populations; and unmet medical need ⁴. CMS guidance adds patient experience, outcomes such as productivity, independence and quality of life where they relate directly to the people taking the drug, and real-world evidence, including evidence from Medicare patients ⁸.

A manufacturer submission in this part answers five questions:

• Which products are the therapeutic alternatives, and for which patients?
• What is the comparative clinical evidence, direct or indirect, and how strong is it?
• What does the drug do for patients that the alternatives do not?
• Which unmet need does it meet, and in which Medicare subgroups?
• What patient-reported and real-world evidence exists, and how much of it comes from Medicare patients?

The price explanation CMS publishes for each drug after negotiation shows how the agency weighed this evidence in earlier rounds and is the best guide to what it expects ⁶. EvySaif prepares the comparative sections of this submission, including systematic literature reviews and indirect treatment comparisons, for US market-access teams.

8. The Legal Limit on Cost-Effectiveness Evidence

Section 1194(e)(2) contains one restriction that shapes the economic content. CMS may not use comparative effectiveness evidence in a way that treats extending the life of an elderly, disabled or terminally ill person as worth less than extending the life of someone younger, not disabled or not terminally ill ⁴. CMS has said it will not use quality-adjusted life-years (QALYs) or similar measures in that way ⁸.

This is not a ban on economic evidence. The cost of the alternatives is a named factor, and evidence on the cost of therapeutic alternatives, healthcare resource use and budget impact can all contribute. Comparative effectiveness and cost-effectiveness analyses have to be structured so that they do not rest on a valuation of life that depends on age, disability or terminal illness; CMS reviews cost-effectiveness measures case by case to decide whether they can be considered ⁸. Models that report life-years, clinical events and costs separately, rather than folding them into a single QALY-based ratio, give CMS results it can use. EvySaif builds and adapts cost-effectiveness models and budget impact models to this limit, reported to the CHEERS 2022 standard.

9. How CMS Picks the Therapeutic Alternatives

CMS identifies possible alternatives from the FDA labels, clinical guidelines, drug classification systems, the major compendia, published studies, its own literature review, Medicare claims, and the manufacturer and public submissions ⁸. Generic drugs and biosimilars can be alternatives, and for a drug with several indications CMS may pick a different alternative for each ⁸. The alternatives, and the prices CMS assigns to them, are a large part of the starting point for the first offer. That is why the manufacturer's own account of the treatment landscape is worth submitting even when the clinical evidence is unremarkable.

For each alternative, the account covers: drug class and mechanism, indications, place in current guidelines, Medicare use, comparative efficacy and safety evidence with the study design and population, administration and monitoring burden, and whether a generic or biosimilar exists.

10. What the Evidence Package Needs

One evidence package serves both submissions if it is organized by the statutory factors. The components below recur across selected drugs; how much weight each carries depends on the product.

Three rules apply to the whole package. Every statement has a source the manufacturer can produce: a study report, a publication, a ledger extract, a patent record. Every number uses one definition across all sections. And the package is written to be read twice, once by the CMS negotiators and once, with confidential commercial information redacted, by the public, because CMS publishes a narrative explanation of each agreed price ⁹.

11. The Fourth Round Timeline: Prices Applying From 2029

CMS published the fourth-round milestones with the proposed rule in June 2026. The dates below are as proposed. The final rule, expected in fall 2026, may change them, and the January 2027 date will be fixed by a CMS web notice in December 2026 ^9,10.

Two features of this calendar drive preparation. The agreement is signed on 28 February and the full data submission is due the next day, so the data have to be ready before selection is announced on 1 February, based on the company's own estimate of whether its product sits in the top 30 by Medicare spend. And the evidence submission is due on the same 1 March date, which leaves four weeks between selection and submission for a package that depends on systematic reviews and models that take months to build. For a manufacturer whose product has a real chance of selection, starting evidence planning before the selection announcement is the prudent course.

Why manufacturers start before selection. The four weeks between the 1 February list and the 1 March deadline are not enough to begin evidence development from scratch. Systematic reviews, indirect comparisons, real-world evidence analyses and economic models take months. A manufacturer with a product near the top of Medicare spending benefits from a selection-readiness evidence file, maintained against the statutory factors and refreshed each year before the selection announcement, so that the March submission is an update rather than a first draft.

Two proposed policies also affect the fourth round. The Small Biotech Exception, which kept qualifying small-company drugs out of selection through 2028, has expired. In its place, the Temporary Floor for Small Biotech Drugs applies to qualifying drugs whose prices first apply in 2029 or 2030: the negotiated price may not be less than 66 percent of the drug's 2021 average non-federal average manufacturer price adjusted for inflation, and the manufacturer has to request the floor by 1 March 2027 ^3,4,9. And a narrow change to the fixed-combination policy would treat a product with an added ingredient that allows a new route of administration (CMS gives the hyaluronidase example) as the same drug as the original for selection purposes ⁹.

12. Drugs That Already Have a Negotiated Price

A drug with an agreed price is not finished with the program. CMS can select it for renegotiation if, among other triggers, a new indication is approved, the drug's status changes or important new evidence appears, and the existing agreement already covers renegotiation ⁹. Manufacturers of drugs from earlier rounds can voluntarily send CMS information that it considers when deciding on renegotiation, through the information collection package revised with the proposed rule ⁹. From 2029, CMS proposes to count the existing MFP among the section 1194(e)(1) factors in any renegotiation ⁹. The evidence package for such a drug is kept up to date, with new trial results, label changes and real-world evidence filed against the statutory factors as they arrive.

13. Keeping the Pricing Frameworks Apart

The MFP is a Medicare price. Medicaid runs the separate Medicaid Drug Rebate Program under section 1927 of the Act, with its own average manufacturer price and best price definitions, and commercial plans and pharmacy benefit managers contract on their own terms. Section 11001 of the Inflation Reduction Act amended section 1927 so that, from 1 January 2026, the MFP of a selected drug is included in Medicaid best price and excluded from average manufacturer price ¹¹. Where the MFP is the lowest price in a rebate period it becomes the best price, and the Medicaid rebate for that drug rises with it. An evidence submission presents wholesale acquisition cost, Medicare payment measures and the Medicaid and commercial context as separate frameworks, each with its own definition, and never uses one as a stand-in for another.

14. The Evidence Submission and the AMCP Dossier

Most market-access teams already hold an AMCP Format dossier for a product in scope. The two documents share evidence and differ in purpose.

The clinical evidence, treatment landscape and disease burden sections of an AMCP dossier are the raw material for the CMS evidence submission, reorganized around the statutory factors and extended to Medicare-specific evidence. The economic section is rebuilt within the section 8 limit. The AMCP Format is described in the EvySaif AMCP Format 5.0 guide, and the global value dossier that usually sits behind both documents in a separate guide.

15. A Preparation Sequence

Steps 6 and 7 are where an outside evidence team is usually brought in. Systematic reviews, network meta-analyses and models take months, and the four weeks between selection and submission do not allow them to start after selection.

16. Medicare Drug Price Negotiation Evidence Support From EvySaif

EvySaif works with US market-access, HEOR and medical affairs teams, and with the US consultancies that serve them, on the evidence side of a Medicare negotiation. The Negotiation Program ICR is the submission framework; the evidence that fills it is the work. The deliverables are:

• Therapeutic alternatives landscape. A structured account of each alternative CMS is likely to name, built from the same sources CMS uses (FDA labels, guidelines, compendia, published studies), with Medicare use and generic or biosimilar status.
• Comparative effectiveness evidence. Systematic literature reviews, network meta-analyses and indirect treatment comparisons for the therapeutic advance and comparative effectiveness factors, with the strength and limits of the evidence stated.
• Unmet need and specific populations. Disease burden, treatment gap and real-world evidence syntheses, including Medicare-population studies, for the unmet need and specific-population factors.
• Economic evidence within the legal limit. Cost-effectiveness and budget impact models built or adapted so that they do not rely on QALY weighting of the kind section 1194(e)(2) prohibits, reported to CHEERS 2022.
• Patient and caregiver evidence. Synthesis of quality of life, treatment burden, adherence and caregiver data, and design support for patient preference studies where the evidence is missing.
• Writing and traceability. The evidence submission itself, the clinical and economic sections of the counteroffer justification, and a source register in which every claim points to a document the manufacturer can produce, with a redaction-ready version for the public explanation.
• Gap assessment. An early review, ideally in the quarter before selection, of what evidence exists against each statutory factor and what has to be commissioned to be ready by 1 March.

The required negotiation data elements (R&D costs, unit costs, federal support, patents, sales and non-FAMP) are prepared by the manufacturer's own finance, legal, regulatory and government pricing teams with US counsel. EvySaif's role in that part is the definitions register, the reconciliation log and the written narrative that accompanies the numbers.

These services sit within the EvySaif HTA and payer submission practice, with real-world evidence and medical writing support. US teams facing a 2027 selection can contact EvySaif to scope the evidence work against the February 2027 calendar.

17. Frequently Asked Questions

References

1. Inflation Reduction Act of 2022, Pub L No. 117-169, sections 11001 and 11002. https://www.congress.gov/bill/117th-congress/house-bill/5376/text
2. Centers for Medicare & Medicaid Services. Medicare Drug Price Negotiation Program: selected drugs and negotiated prices. https://www.cms.gov/initiatives/medicare-prescription-drug-affordability/overview/medicare-drug-price-negotiation-program/selected-drugs-negotiated-prices
3. Centers for Medicare & Medicaid Services. CMS proposed rule locks in lower prices and fosters innovation for the Medicare Drug Price Negotiation Program. Press release, 12 June 2026. https://www.cms.gov/newsroom/press-releases/cms-proposed-rule-locks-lower-prices-fosters-innovation-medicare-drug-price-negotiation-program
4. Social Security Act, sections 1191 to 1198, as codified at 42 USC 1320f to 1320f-7; section 1194 at 42 USC 1320f-3. https://www.law.cornell.edu/uscode/text/42/1320f-3
5. Centers for Medicare & Medicaid Services. CMS announces selection of drugs for third cycle of Medicare Drug Price Negotiation Program, including first-ever Part B drugs. Press release, 27 January 2026. https://www.cms.gov/newsroom/press-releases/cms-announces-selection-drugs-third-cycle-medicare-drug-price-negotiation-program-including-first
6. Centers for Medicare & Medicaid Services. Fact sheet: negotiated prices for initial price applicability year 2027. https://www.cms.gov/files/document/fact-sheet-negotiated-prices-ipay-2027.pdf
7. Centers for Medicare & Medicaid Services. CMS announces manufacturer participation in third cycle of Medicare Drug Price Negotiation. Fact sheet, 13 March 2026. https://www.cms.gov/newsroom/fact-sheets/cms-announces-manufacturer-participation-third-cycle-medicare-drug-price-negotiation
8. Centers for Medicare & Medicaid Services. Medicare Drug Price Negotiation Program: final guidance, implementation of sections 1191 to 1198 of the Social Security Act for initial price applicability year 2028 and manufacturer effectuation of the maximum fair price in 2026, 2027, and 2028. 30 September 2025, technical correction 16 December 2025. https://www.cms.gov/priorities/medicare-prescription-drug-affordability/overview/medicare-drug-price-negotiation-program/guidance-policy-documents
9. Centers for Medicare & Medicaid Services. Medicare Drug Price Negotiation Program proposed rule (CMS-4215-P): fact sheet. June 2026. https://www.cms.gov/files/document/mdpnp-nprm-fact-sheet.pdf
10. Centers for Medicare & Medicaid Services. Timeline: Medicare Drug Price Negotiation Program proposed rule (CMS-4215-P), key dates for initial price applicability year 2029. June 2026. https://www.cms.gov/files/document/mdpnp-nprm-milestones.pdf
11. Centers for Medicare & Medicaid Services, Center for Medicaid and CHIP Services. Medicaid Drug Rebate Program Notice, Release No. 117: impact of certain changes on average manufacturer price and Medicaid best price. 23 January 2023. https://www.medicaid.gov/prescription-drugs/downloads/mfr-rel-117.pdf
12. Centers for Medicare & Medicaid Services. Medicare Drug Price Negotiation Program: negotiated prices for initial price applicability year 2026. Fact sheet. https://www.cms.gov/newsroom/fact-sheets/medicare-drug-price-negotiation-program-negotiated-prices-initial-price-applicability-year-2026

EvySaif Research Solutions is a clinician-led medical writing, regulatory affairs, HEOR and drug clinical development consultancy serving pharmaceutical, biotechnology and medical device companies across India, the Middle East and Europe.

Last reviewed: September 2026. This article is provided for general information and does not constitute legal, regulatory or pricing advice. The fourth-round dates are those proposed by CMS in June 2026 and are subject to the final rule.