MFPs Reshape Payer Negotiations, Manufacturer Strategies

Medicare's maximum fair prices (MFPs) have yet to reshape commercial formularies, but payers are already using them as leverage in negotiations, while manufacturers are rethinking their rebate and evidence strategies in response to the prices, experts highlighted in part 2 of an interview at the Academy of Managed Care Pharmacy (AMCP) Nexus 2026 meeting.

The clip features insights from Hiva Pourarsalan, PharmD, of Aetna; Lisa Cashman, PharmD, of Lumanity; and Johnathan Toft, PharmD, MBA, of Lumanity, 3 panelists from the “Beyond Price Negotiation: Has Maximum Fair Price (MFP) Reshaped Formulary Dynamics?” session.

MFPs will not change everything about commercial coverage, Pourarsalan said, but they are establishing a new standard as commercial plans recognize that manufacturers can negotiate lower prices. Although little has changed so far, Cashman said she expects MFPs to gain influence over time.

In addition, Toft explained that Part D rebates have fallen sharply because of MFPs, shifting the focus to list prices. On the commercial side, MFPs provide leverage for payers, who know what the publicly available prices are and will push for lower ones. Although that is not always feasible, the prices provide another reference point in negotiations, he said.

Pourarsalan noted that because the list of negotiated drugs changes every year, plans need to be ready to adjust their formularies, while manufacturers need to revisit the incentives they offer. Cashman outlined 2 priorities for doing so. First, manufacturers should track which drugs are selected for negotiation, including whether their own products or competing drugs in the same therapeutic class could be included. Second, they should prepare for discussions with payers and consider whether they need to increase rebates to stay competitive.

Toft emphasized the importance of refining value stories. With budgets stretched, manufacturers should build a comprehensive evidence package that goes beyond clinical trial data to include real-world evidence, he said.

On the payer side, Pourarsalan said she expects plans to develop creative utilization management approaches for alternatives to MFP drugs over the long term. In the short term, plans are focused on maintaining compliance while ensuring adequate coverage for members.

Toft added that formularies will likely become more selective. Because MFP drugs are required to be covered and are also financially beneficial for plans to include, non-MFP drugs are now at a disadvantage from the payer perspective. Some payers have already exited the Part D space because of the implications of the Inflation Reduction Act's Part D redesign, he noted.

“You have a lot more liability in the catastrophic phase,” Toft concluded. “We have a lot more drugs that are specialty drugs, so really reaching that catastrophic phase very early in the year, and now that’s become a significant financial liability for a number of plans.”