IRA Medicare Drug Price Negotiation: Round Three Expected in 2028 with Reforms Aimed at Pharma Manageability

The Inflation Reduction Act (IRA) mandates Medicare drug price negotiations:
10 drugs effective January 1, 2026; 15 drugs in 2027; and 15 more in 2028, referred to as 'round three'.127

President Trump's April 15, 2025 Executive Order 14273 directs HHS to propose improvements to the Medicare Drug Price Negotiation Program (MDPNP) for 2028 within 60 days, including greater transparency, prioritizing high-cost drugs, and minimizing impacts on U.S. pharmaceutical innovation.1

The order addresses the 'pill penalty' by tasking HHS and Congress to equalize negotiation timelines for small molecule drugs (7 years post-FDA approval) and biologics (11 years), potentially making round three more manageable for pharma manufacturers.1

CMS completed negotiations for the first 10 drugs in 2024, with agreements reached via offers, counteroffers, and meetings; prices take effect January 1, 2026, estimated to save $6 billion.24

Reforms couple with 2026 Part D changes, like raising the out-of-pocket cap to $2100, which may offset negotiation pressures on pharma.1

Sources:

1. https://www.healthlawadvisor.com/medicare-drug-price-negotiation-program-the-inflation-reduction-act-pill-penalty-and-other-ira-reforms-on-the-horizon-for-2026

2. https://www.cms.gov/newsroom/fact-sheets/medicare-drug-price-negotiation-program-negotiated-prices-initial-price-applicability-year-2026

4. https://www.mintz.com/insights-center/viewpoints/2146/2024-08-20-cms-2026-ira-price-negotiations-results-likely-create

7. https://www.cms.gov/priorities/medicare-prescription-drug-affordability/overview/medicare-drug-price-negotiation-program/selected-drugs-negotiated-prices