U.S. drug pricing reform creates a new reality | AMCP Annual 2026

Drug pricing reform is delivering both disruption and transformation. While the intent has been greater affordability and transparency, the transition is exposing structural tensions in how drugs are priced, paid for, and accessed in the United States, according to panelists at a session at the Academy of Managed Care Pharmacy (AMCP) annual meeting in Nashville.

The Inflation Reduction Act’s Maximum Fair Price and the policy change that resulted in the Most Favored Nation pricing are expected to trigger market disruption and have significant impacts for patients, payers and employers.

The prescription drug market is undergoing a fundamental shift, said Lisa Kennedy, Ph.D., founder and chief economist at Innopiphany, a business consulting company. “There is real concern about how this is completely remodeling the current industry.”

The Maximum Fair Price (MFP), established by the Inflation Reduction Act, allows CMS to negotiate prices for Medicare drugs. Discounts vary, with reductions ranging from roughly 25% to as high as 60%, and in some early cases up to 85% for certain therapies, particularly in diabetes.

The Most Favored Nation (MFN) ties U.S. drug prices to those in other developed countries through international reference pricing. MFN benchmarks U.S. prices against a basket of nations—often selecting the lowest or second-lowest price among peers such as the United Kingdom, France, and Denmark. The goal is to align U.S. prices more closely with global norms, where drug costs are typically lower.

Reform will create a new reality

Through 2027, uncertainty and confusion are likely to be the new norm as assumptions and pricing models used in current contracts become outdated. Employers, health plans, health systems, and pharmacy benefit managers need to unlearn past assumptions, Sarah Rivera, Pharm.D., vice president, clinical operations at Illuma Advisors, said during the session. “There is a brand new reality,” she said. “We’re going to have to look at things in a different way.”

Part of this new reality is that higher rebates may not always be the better deal for payers, and reductions from the wholesale acquisition cost (WAC) may not go toward plan savings, Rivera said. With MFP-driven price cuts reducing rebates, traditional pricing models are becoming less reliable.

“Rebates mask the cost, but the net cost per claim is going to be a crucial metric, and we're going to have to take into account other resources as part of that calculation,” Rivera said.

When the dust settles, the WAC prices may end up lower. The Most Favored Nation effort is expected to compress WAC prices and create a “narrowing price corridor,” where U.S. prices fall while international prices rise. PBMs and plans will also have to prepare for continuous formulary recalibration and use a metric of total cost of care that goes across the pharmacy and medical benefit.

Unintended consequences

Speakers during the session addressed how these pricing changes could ripple through the system. Hospitals and providers are likely to feel an impact, particularly through changes to the 340B drug discount program, a major revenue source for safety-net institutions. Currently about $81.4 billion of U.S. drug expenditure flows through 340B programs. Reduced 340B margins on drugs could lead to significant funding gaps for programs that rely on these revenues.

The reduced 340B funding could result in health systems reducing funding for programs or selecting drugs that continue to have 340B revenue and moving away from those with lower prices negotiated by CMS. “We could see providers start switching some of their prescribing patterns, especially if they work for a system that is focused on 340B revenue,” said Deb Curry, Pharm.D., chief clinical officer at Health Delegates, which manages pharmacy and medical rebates for plans, employers and PBMs.

Modeling presented in the discussion suggests provider revenue losses could reach hundreds of millions per month, with some long-term care facilities potentially facing up to 85% reductions in drug-related revenue streams. Broader economic effects could include hundreds of thousands of job losses across healthcare and related sectors over the next decade.

For patients, the reforms around it could mean relief at the pharmacy counter but also lead to confusion. Surveys show that patients are becoming more involved with their healthcare, something Rivera pointed out the payers have wanted for years. The push for price transparency, along with the direct-to-consumer platforms such as GoodRx and Mark Cuban’s Cost Plus, it will allow patients to become more consumer-like about healthcare. Panelists said that about 75% of patients now actively compare drug prices, with many turning to discount programs that generated more than $17 billion in savings in 2024.

“All this transparency and all the information that’s out there are reshaping the expectations and helping people to understand what they’re doing,” Curry said. “Members, payers and employer reps that are buying their plans are trying to understand to answer the questions for their employers.”

She said going outside the plan benefits will likely lead to fragmentation for both payers and patients. If patients access drugs outside of their health plan, employers and payers will not see the entire picture of the members, and patients also may not have the insight into their entire benefit. “They’re not realizing that it may seem like a lower cost for them up front, because that’s the price they're seeing,” Curry said. “Their price through their benefit might actually ultimately be lower, but they don't see all of the factors in the levers that are happening.”