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NORC at the University Chicago

Medicare Drug Price Negotiation Support

Medical professionals and pharmacists provide medication at the pharmacy.
Analytic and research support for CMS’s first-ever Medicare drug price negotiations
  • Client
    Centers for Medicare & Medicaid Services
  • Dates
    2024 – 2030

Problem

High drug costs strain Medicare beneficiaries, but CMS lacked a negotiation infrastructure.

In 2024, just 15 high-cost drugs accounted for $42.5 billion in Medicare Part D spending—about 15 percent of total costs—and $1.7 billion in out-of-pocket expenses for beneficiaries. For older adults and people with disabilities who rely on these medications, the financial burden can force impossible choices between prescriptions and other necessities.

The Inflation Reduction Act authorized CMS to negotiate prices for select high-cost drugs for the first time in Medicare’s history. But implementing this provision required building an entirely new program: developing analytic frameworks, establishing transparent processes, integrating clinical evidence, and engaging stakeholders—all under tight statutory deadlines. CMS needed partners with expertise in health policy, data science, and health economics to stand up a negotiation process that could withstand legal and public scrutiny while delivering meaningful savings.

Solution

NORC delivers data analytics, evidence review, and stakeholder engagement to support CMS’s negotiation process.

As a partner to Research Triangle Institute (RTI), NORC supports CMS’s Medicare Drug Price Negotiation Program, which establishes Maximum Fair Prices for single source brand-name drugs covered by Medicare. NORC’s involvement began with implementation for the 2027 Initial Price Applicability Year and continues through 2030.

Building a first-of-its-kind federal negotiation program requires integrating multiple streams of evidence under compressed timelines. NORC’s team develops decision models, validates pricing data submitted by manufacturers, and conducts comparative effectiveness analyses to inform CMS’s negotiating positions. We also support clinical research literature reviews that help establish the therapeutic value of selected drugs.

Beyond analytics, NORC helps CMS create opportunities for public input. This includes organizing patient-focused listening sessions, town halls, and meetings with physicians—ensuring the negotiation process incorporates perspectives from those most affected by drug pricing decisions. Our team also develops reports and briefing materials that translate complex analytic findings into actionable intelligence for CMS negotiators. Throughout, we ensure secure data practices for supporting both Part B and Part D Inflation Rebate Programs.

Result

NORC’s work informs negotiated prices for 15 drugs in 2027, with new drugs added annually.

NORC’s support started with the second round of negotiations, covering 15 brand-name drugs with Maximum Fair Prices taking effect in 2027 with an estimated savings of $12B dollars for Medicare and $685 million on out-of-pocket costs for beneficiaries. This phase builds on the program’s initial round, which yielded negotiated prices for 10 brand-name drugs.

NORC provides ongoing support through 2030, encompassing additional rounds of drug selection and price negotiation as the program expands. Each year, CMS will select new drugs for price negotiation, and NORC will continue providing the analytic foundation and stakeholder engagement that enables evidence-based price-setting.

This work demonstrates NORC’s capacity to support high-stakes federal programs that directly affect millions of Americans, combining health economics expertise, data infrastructure, and strategic communications to help CMS balance affordability goals with the complexities of pharmaceutical policy.

Project Leads

“This project showcases NORC’s expertise in helping our nation’s leaders address rising prescription drug costs, improve health care affordability for vulnerable populations, and ease Medicare financial burden.”

Lateefah Hughes

Vice President, Health Care Evaluation

“This project showcases NORC’s expertise in helping our nation’s leaders address rising prescription drug costs, improve health care affordability for vulnerable populations, and ease Medicare financial burden.”

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