Physician-administered drugs, typically covered under Medicare Part B and the commercial medical benefit, are entering one of the most consequential transition periods in decades. What was once a relatively stable “buy-and-bill” ecosystem is increasingly being reshaped by:

  • Rising drug costs
  • Federal drug price negotiation
  • Biosimilar market dynamics
  • Site-of-care optimization
  • Increased payer management
  • 340B growth and potential for reform
  • Wide range of non-drug reimbursement pressures
  • Elusive threat of Most-Favored Nation price controls

The recent announcement of the next round of drugs selected for negotiation under the Inflation Reduction Act serves as a major catalyst for change in the physician-administered drug market. Beginning in 2028, selected Part B drugs will be subject to a Maximum Fair Price (MFP), which is expected in many cases to be significantly lower than current Average Sales Prices (ASP). As a result, provider reimbursement in Medicare fee-for-service will shift from being based on ASP to being tied to the MFP.

Manufacturers will still be required to report sales and volume data to CMS for ASP calculations, including discounts associated with the MFP. However, CMS has signaled that it will likely publish only the lower of the MFP or ASP rather than reporting both prices separately, limiting transparency into the underlying ASP once negotiated pricing takes effect.

At the same time, looming losses of exclusivity across key oncology and immunology therapies raise questions about biosimilar entry and the market conditions into which future products will be launched. The result is not incremental change, but rather a recalibration across the physician-administered drug channel, especially for certain therapeutic areas.

As manufacturers align their strategies going forward, there are key dynamics to watch.

1. The future of ASP as a market anchor

For about two decades, ASP has served as the foundational benchmark for Medicare reimbursement and a reference point for many commercial contracts. If ASP becomes less transparent or unavailable for negotiated drugs, providers and payers may face greater uncertainty around margin predictability and pricing benchmarks. Commercial contracts that rely on ASP may need to be reconsidered or rewritten, and over time payers may begin exploring alternative benchmarks or contracting structures. While these changes will initially affect only a limited number of negotiated drugs, the ripple effects could influence commercial reimbursement dynamics across a much broader portion of the physician-administered drug market.

Despite some criticisms regarding its calculation methodologies, data lag, and financial impact on providers, ASP has generally been considered a robust tool that effectively captures market dynamics, contains physician-administered drug spending over time, and provides valuable transparency. However, if ASP’s significance as a foundational market anchor erodes, it could cause significant variability across the broader healthcare ecosystem and disproportionally affect smaller providers.

2. Continued focus and interest from payers to manage the medical benefit

The historical separation between pharmacy and medical benefits has been narrowing for some time in response to both policy and market catalysts. Payers are increasingly integrating utilization management, site of care limitations, data analytics, and contracting strategies across both domains. Physician-administered drugs that once sat squarely in the medical benefit are now often subject to rigorous utilization management and acquisition mandates (e.g., white bagging requirements that lead to payments through pharmacy benefit) designed to shift costs and oversight toward the pharmacy benefit.

While this convergence creates opportunities for holistic cost control, it may also present challenges for providers and patients. Although policy proposals to shift Part B drugs into Part D in Medicare have been dormant, the practical realities stemming from IRA negotiations, Part D redesign, Pharmacy Benefit Manager (PBM) reform, and Medicare Advantage payment pressures may continue to accelerate cross-benefit management, especially as various players in the supply chain continue to evolve their business models.

3. The Site-of-Care Paradox: Provider Sustainability Under Pressure

The market for physician-administered drugs is currently defined by a fundamental structural tension: while payers continue to focus on cost-containment and site-of-care optimization, this drive may also further destabilize the independent community practices necessary for high-value, lower-cost care delivery.

A primary driver of this tension is the continued erosion of the traditional buy-and-bill model, as large payers increasingly steer drug acquisition through their own vertically integrated specialty pharmacies. While some physicians may be willing to use alternative fulfillment models such as white bagging, many strongly resist mandates that dictate where and how they must acquire medications, valuing the flexibility to choose the channel that best fits their clinical and operational needs.

Providers also emphasize that the buy-and-bill model offers important advantages for patients, including greater control over inventory, the ability to treat patients immediately, and fewer logistical barriers to care. At the same time, competitive dynamics are further complicated by the uneven economics created by the 340B Drug Pricing Program, which allows eligible entities to purchase drugs at deep discounts and often realize significantly higher margins than independent community practices. Together, these pressures continue to challenge the financial viability of smaller independent providers.

Without policy and market mitigation strategies that align cost-containment with practice sustainability, the market will likely see continued provider consolidation and vertical integration across the channel. Many physician practices have already turned to health systems and hospitals to maintain economic viability. Those seeking to remain independent are increasingly aligning into larger practice groups, networks, or integrating with other channel entities, like distributors and Group Purchasing Organizations (GPOs). While these moves may improve the economic viability and operational scale for practices, they also risk reshaping clinical decision-making, eroding the community-based care model, and increasing costs to patients and the broader healthcare system.

4. The Shifting Economics of Biosimilar Launches

The U.S. biosimilar pipeline is entering a pivotal phase in 2026, supported by a growing number of FDA approvals and increasingly streamlined regulatory pathways. Yet, despite these development tailwinds and a looming wave of specialty biologic patent expirations, the market faces the complex downstream effects of Medicare price negotiations. While the IRA attempts to protect competition by offering negotiation exclusions and delay pathways when biosimilars are marketed or close to being marketed, an unintended consequence is emerging: biosimilars that fail to reach the market by a certain timeline will be forced to launch against a significantly eroded price benchmark that may jump start a race to the bottom. Moving forward, these cascading impacts on broader therapeutic dynamics, prescribing behavior, and provider cost recovery will serve as a critical test of whether current policy mechanisms can sustainably align with long-term affordability and systemic savings.

Another emerging dynamic is the growing interest in private-label biosimilars launched by vertically integrated payers and pharmacy benefit managers. Organizations such as CVS Health, Cigna, and UnitedHealth Group have begun introducing their own biosimilars, often distributed through affiliated specialty pharmacies. While these products are often positioned as a mechanism to lower drug costs, they also reinforce payer control over drug distribution and reimbursement pathways. For physician-administered drugs, this raises new questions about provider choice, channel neutrality, and how biosimilar competition may reshape buy-and-bill economics over time.

5. The looming threat of Most Favored Nation (MFN) proposals and a “Global ASP”

This current push for global pricing parity marks a significant departure from the MFN attempt during the first Trump administration, which focused on cutting reimbursement for provider-administered drugs and was ultimately blocked by the courts for procedural reasons. The new strategy shifts implementation upstream to require direct manufacturer rebates to the federal government and participating states, which is viewed by the administration as less disruptive at the point of care, but still carries significant implications for U.S. commercial, pricing, and access strategy.

The proposed Global Benchmark for Efficient Drug Pricing (GLOBE) Model specifically targets physician-administered drugs and the voluntary GENErating cost Reductions fOr U.S. Medicaid (GENEROUS) expects participating manufacturers to offer supplementary rebates for all or most of their products. It remains unclear which manufacturers plan to participate in GENEROUS, while GLOBE may still evolve significantly and finalization is not guaranteed. In parallel, President Trump has called on Congress to codify these MFN models and the negotiated voluntary deals with manufacturers, resulting in draft bills like the Most Favored Patient Act of 2026 (HR 7837). But these political signals alone are already causing a recalibration in commercialization and pricing strategies.

Moreover, the federal government appears to be laying the groundwork for a new infrastructure for global price and volume reporting, and CMS is actively working through the associated confidentiality considerations. This could de-facto create something similar to global ASP. A shift like that would mean that going forward, manufacturers may start routinely evaluating and modeling decisions about ex-US pricing and volume in the same way they have assessed the impact on ASP calculations of discounts and rebates they are able to offer to US payers and provider customers.

Strategic Implications: Redefining Market Access and Policy Strategy

For manufacturers, navigating this market recalibration requires a pivot toward more sophisticated strategies.

  • Understanding Broad Therapeutic Dynamics: The “MFP-ASP-MFN-Biosimilar” interplay requires advanced, scenario-based modeling. Manufacturers need to quantify how price erosion and margin compression will shift provider prescribing patterns and model the gross-to-net (GTN) impact over the next 3-5 years. They also need to proactively develop contracting frameworks that protect therapeutic choice in a distorted market.
  • Navigating Upstream and Downstream Integration: Commercial strategies must now account for two distinct layers of integration. While Payer-PBMs manage utilization and reimbursement, the Wholesaler-GPO-Provider nexus manages the economics of acquisition and increasingly may influence clinical choices. Manufacturers need a dual-track strategy that addresses the contracting nuances of both stakeholders to ensure proper access. At the same time, those operating in the buy-and-bill ecosystem understand the inherent risks of contracting simultaneously with both payers and providers: aggressive discounts can rapidly drive down ASP, compress provider margins, and potentially leave practices financially “underwater.”
  • Supporting the Infrastructure of Care: A majority of patients receiving physician-administered therapies continue to be treated in community-based settings, which play a critical role in maintaining patient access and continuity of care. As competitive pressures intensify and payer-driven channel strategies expand, defending the sustainability of the community practice model will become an important commercial and policy priority. Manufacturers may need to explore innovative contracting approaches and support policy initiatives that reinforce the financial viability of independent practices. At the same time, manufacturers are increasingly being asked to balance two competing objectives: maintaining provider sustainability while securing payer coverage and formulary access. These goals are often difficult to reconcile and must be managed carefully.
  • Prepare for Evolving Value Demonstration Demands: Evidence strategies will also need to evolve. Manufacturers must increasingly develop value propositions that resonate across an ecosystem of stakeholders with differing and sometimes conflicting priorities amidst tightening margins and reimbursement volatility.