CMS Projects Billions in Future Savings for Seniors; Maximum Fair Price (MFP) Negotiation Policy Originated Under Biden Administration | iPharmaCenter

The Centers for Medicare & Medicaid Services (CMS) announced a projected net savings of 44%, or $12 billion, on 15 widely used drugs for cancer and other chronic conditions, building on efforts to make prescriptions more affordable for Medicare beneficiaries.

Under the Maximum Fair Price (MFP) negotiation policy, established as part of the Biden administration’s Inflation Reduction Act, CMS has negotiated lower prices for high-cost drugs, with these new prices set to take effect on January 1, 2027.

The CMS announcement highlights potential annual savings based on what 2024 spending would have been if MFPs were already in place. These savings serve as a projection illustrating the impact once the new prices are implemented.

“These results stand in stark contrast to past years and show the value of strong negotiation,” said CMS Administrator Mehmet Oz, MD. “We’re using historical numbers to show how this administration’s reforms will result in billions in savings for seniors and the Medicare program.”

The 15 drugs covered by this cycle treat common and serious conditions including cancer, diabetes, and asthma, and accounted for over $42.5 billion of Medicare Part D spending in 2024.

The Medicare Drug Price Negotiation Program, including the MFP authority, was created under the Inflation Reduction Act passed during the Biden administration. The CMS press release attributes the implementation of drug price reforms to current leadership, while the law’s framework and authorization were set with bipartisan intent to drive savings and affordability.ring projected savings are understood before they are realized in 2027 and beyond.