Reading the Redacted Room to Win at the No Win Negotiation

Prior to the holidays, the redacted explanations of the IPAY2026 negotiation meetings between manufacturers and CMS were released – one heck of a read. To save the time of commercial leaders, a specialist team at Verpora (which specifically helps manufacturers prepare for IRA negotiations), spent Christmas and the New Year extracting relevant insight and providing their perspectives. Key questions addressed in this brief article (3-5 minute read) include:

1. What are the top ten negotiation learnings from the IPAY2026 meetings?
2. Why were manufacturers and CMS discussing average net commercial price?
3. Which roles and specific people at CMS were negotiating?
4. To what extent did meetings differ by brand?
5. How should you evolve your negotiation approach for IPAY2027 and beyond?

First up, the top ten negotiation learnings:

1) The CMS negotiation team had a distinct group of four to five members which remained constant across all manufacturer meetings and the three rounds of negotiations. In order of meeting attendance, CMS personnel were:

2) All manufacturers attended all three rounds of negotiations, predominately in a live format. Either through intent or circumstance, ENBREL was the only team to take an atypical approach. In negotiation meeting one, the redacted statements suggest the ENBREL team attended in full, in person. For meeting two, the entire team is documented as being virtual. For the final negotiation only one person from U.S. Health Policy and Reimbursement attended, the other five being virtual. Members of the ENBREL team were consistent across all three meetings.

3) Most manufacturers kept the same negotiation team across the three rounds. While it is hard to equate the level of role in one business directly with another, ELIQUIS appeared to have a predominately Vice President attendance, FARXIGA an Executive Director-level team and XARELTO/ STELARA a mixed approach.

4) CMS stated that outside the written initial and counteroffer, over fifty other offers and counteroffers were made.

5) CMS claims it moved more than the manufacturer in sixty percent of the price negotiations. In the other forty percent, the manufacturer moved more than CMS.

6) For five drugs, the process resulted in CMS and the Primary Manufacturer reaching an agreement on a negotiated price in association with a negotiation meeting. In four of these cases, CMS accepted a revised counteroffer proposed by the Primary Manufacturer. For the remaining five selected drugs, CMS sent a written final offer to the Primary Manufacturer, and in each instance, the Primary Manufacturer accepted CMS’ offer on or before the statutory deadline.

7) Three brands (IMBRUVICA, JANUVIA & JARDIANCE) requested their negotiation team names to be redacted from the release of the explanations.

8) The agenda for the first negotiation meeting was relatively standard and consistent across all manufacturers except for XARELTO and STELARA (both Janssen). These brands included the same additional items:

• Request for CMS to walk through their procedural approach for developing an initial offer, including:
• Process for evaluating the clinical value for each indication
• Understanding of how CMS translated clinical rating Likert scales to initial price offer
• Understanding of CMS methodology for incorporating 'additional factors' in establishing clinical benefit and an upward/downward adjustment
• Review of Janssen’s appropriate therapeutic alternatives for this exercise and other elements in rebuttal to CMS proposed initial price offer
• CMS assessment of Janssen’s counteroffer based on initial offer and procedural approach

9) In the second negotiation meeting, agendas had much greater variability, with the following notable additions:

IMBRUVICA:

Any additional information from the Primary Manufacturer on comparative adverse event evidence across BTKis (including head-to-head studies, economic adverse event burden, and real-world evidence on the management of cardiovascular adverse events)

ii. Unmet medical need re: cGVHD and oral suspension?

iii. Commercial net price

iv. Therapeutic alternative selection?

v. FDA applications and approvals?

vi. Patient perspective

vii. Therapeutic advance?

viii. R&D and acquisition costs?

ix. Patents and exclusivities

x. Discussion of Primary Manufacturer’s request to understand the pathway for voluntary termination

FARXIGA:

i. Any additional information from Primary Manufacturer on medical cost offset data?

ii. Any additional information from Primary Manufacturer on the impact of previously discussed access concerns (JANUVIA & JARDIANCE each had the same agenda item)

JANUVIA:

i. Further discussion of commercial average net price?

ii. Any other considerations that CMS or the Primary Manufacturer would like to discuss

1. Potential for revised therapeutic alternative basket/impact on CMS offer

STELARA:

i. Any additional information from the Primary Manufacturer on comparative evidence for Stelara and CMS’ identified therapeutic alternatives (TNFis and non-TNFis), including among patients with Crohn's disease and ulcerative colitis?

ii. Review why treatment persistence and drug survival are the same?

iii. Discuss, for each indication, Primary Manufacturer’s rationale for upward adjustment in rating

iv. Review why STELARA? is differentiated from TNFi

ENTRESTO:

i. Discussion of ENTRESTO utilization trends across heart failure subpopulations

ii. Any additional information from Primary Manufacturer on medical cost offset data

iii. Any additional information from Primary Manufacturer on the impact of previously discussed access concerns

XARELTO:

i. Discuss the clinical rating for NVAF and VTE, including specific questions shared by the Primary Manufacturer

ii. Unmet medical need

iii. Medicare beneficiary risk

ENBREL:

i. Further discussion of real-world comparative evidence relative to therapeutic alternatives

ii. Any additional information from Primary Manufacturer on the impact of previously discussed access concerns

JARDIANCE:

i. Discussion of Boehringer Ingelheim’s request for additional information related to CMS’ initial offer

ii. Discussion of Jardiance utilization distribution across indications

iii. Any additional information from the Primary Manufacturer and joint discussion [redacted]

iv. Any additional information from the Primary Manufacturer on the impact of previously discussed access concerns

10) In the final negotiation meeting, as the discussion probably turned to finalizing a number, agendas were very much simplified and relatively constant, with the following exceptions:

ELIQUIS:

i. Revised offer/counteroffer price discussion:

1. Active, back and forth price negotiation, consistent with BMS’ standard business practices, with the goal of shared understanding of Eliquis’ value to Medicare and to patients and better alignment on that value.?

ENBREL:

i. Continued discussion of formulary access considerations?

IMBRUVICA:

i. Revised offer/counteroffer price discussion

ii. Adjustment due to R&D recoupment and acquisition costs?

iii. Adjustment due to patents, exclusivities, and FDA approvals

iv. New information informing comparative benefit since the May 31 meeting

Conclusions - Verpora’s Payer & Negotiation Specialist Thoughts

On the surface, the redacted may not appear to provide much information. However a more forensic analysis, overlaid with personal experience in IPAY2026 and IPAY2027, reveals deeper insight that should shape manufacturers future thinking in the following ways.

1) The CMS negotiation team was relatively constant for IPAY2026 but did not remain fixed. This underpins the need for manufacturers to effectively communicate simple messages that can be understood by, and resonate with, non-therapy specialists. By keeping it simple, manufacturer's messages are more likely to communicated effectively outside of the meeting to CMS's wider decision-making network.

2) With over fifty offers and counter offers (above the initial written offer & counteroffer) and ten drugs, this averages to five ‘live’ trades per drug or three price moves by the manufacturer (excluding the initial written counteroffer). The way CMS have organized negotiations for IPAY2027 is clever. The introduction of the first negotiation meeting prior to the counteroffer, and confirmation of the ability to use electronic communication outside of meetings, creates additional trading opportunities. Additionally, expect CMS to switch that movement from the opening price around in IPAY2027 – 60:40 is more than likely to be in CMS’s favor, not the manufacturers.

In simple terms, this means that manufacturers who do not prepare their executive teams early, and get practicing at being disciplined in negotiations, are going to lose more than they want. Negotiation team preparation and practise will be everything in IPAY2027.

3) Over four brands (FARXIGA, JANUVIA, ENBREL & JARDIANCE) requested specific agenda items on formulary or access, meaning this area was one of the highest consistent concerns. Going forward, the inability for CMS to negotiate and guarantee access conditions in return for price, remains a significant challenge. It will be interesting to see how PBMS adopt on the implementation of IPAY2026, if this creates unintended consequences and changes the dynamics of future negotiations.

4) We can’t be sure of the reason why the ENBREL team took a different approach to attending the meeting, or if it changed the outcome, but could this be a sign of things to come? As IRA drug price negotiations become normalized and CMS staff potentially a little tired of meetings, there is an increased need for manufacturers to prepare for their negotiations to be online.

5) A final thought – ‘commercial net price’. Two of the drugs (IMBRUVICA & JANUVIA) listed this as an agenda item. It raises a question, “why would this be specifically pulled out for discussion following the initial offer?” There could be many reasons but one theory is that CMS’s objective is simply to achieve as close to U.S. commercial average net price as possible (for relevant products). The ‘black box’ use of therapeutic alternatives (TAs), unmet medical need, comparative effectiveness etc. being a mere smoke screen? ?Without insight into the CMS pricing model, which the administration will not to release for whatever reason, we can’t tell. However, many manufacturers have invested considerable time modeling pricing scenarios based on a range of therapeutic scenarios. Perhaps a simple starting point is to look at average commercial net price (for relevant products). In many ways, the market has already set the brands net price and CMS now knows it!

For further information on how Verpora's team of former government payers and negotiation strategists can assist your executives in preparing for their IPAY2027 negotiations, please contact: [email protected]

Special thank you to J'Neisha Smith , Healthcare Research Analyst at Verpora, for her unwavering diligence in the research to prepare this article.