What was once a relatively stable “buy-and-bill” ecosystem for physician-administered drugs is 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
  • 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…