Milliman was commissioned by the Pharmaceutical Research and Manufacturers of America (PhRMA) to look at the population of Part D beneficiaries who are likely to experience impactful annual out-of-pocket (OOP) savings, specifically due to the implementation of maximum fair prices (MFPs) under the Medicare Drug Price Negotiation Program (MDPNP). The analysis examines Part D claims data to evaluate utilization and spending patterns across the benefit structure.
In our analysis of the data, we look at Research Identifiable Files from the Centers for Medicare and Medicaid Services for beneficiaries who use drugs selected across the first three initial price applicability year (IPAY) cohorts (IPAY 2026, 2027, and 2028). We focused specifically on the non-employer group waiver plan (non-EGWP) population, as these beneficiaries are most directly exposed to OOP costs and therefore most likely to be impacted by changes in drug pricing.
Key takeaways
- The vast majority (93%) of non-EGWP Part D beneficiaries are not expected to experience lower annual OOP costs from the IPAY 2026 MFPs in 2026, with only 7% potentially seeing savings.
- 17% of non-EGWP Part D beneficiaries use an IPAY 2026 drug and 41% of those beneficiaries have the potential for OOP savings.
- Among IPAY 2026 drug utilizers, the opportunity for annual OOP savings is limited to the 41% who are non-low income beneficiaries not reaching the maximum OOP limit.
- Future IPAYs are likely to impact an incrementally smaller portion of beneficiaries, as fewer members are expected to use drugs selected for IPAY 2027 and IPAY 2028 compared with IPAY 2026.
- The average monthly prescription drug plan premium increased by $8, while the average monthly Medicare Advantage prescription drug premium remained nearly flat (-$1),
- In many cases, plans increased deductibles to maintain lower premium increases.
This report was commissioned by PhRMA.