What CMS’s Part B Expansion Means for Pharma and Providers

In 2026, Medicare drug price negotiations will move into a new phase. For the first time, the Centers for Medicare and Medicaid Services (CMS) will apply its Inflation Reduction Act (IRA) authority to negotiate prices for certain Part B drugs—a category that includes many of the most expensive, provider-administered therapies in the U.S. healthcare system.

This is more than a policy milestone. It marks a fundamental shift in how pharmaceutical companies set prices—and how providers deliver high-cost treatments.

The implications? Significant, immediate, and systemic. Pricing autonomy is narrowing. Margin pressure is mounting. And the status quo is no longer a viable strategy.

The 2026 Expansion From Retail to Clinic

After initially focusing on retail drugs under Part D, CMS will begin negotiating prices for Part B drugs—many of which are infused or injected by providers across specialties like oncology and rheumatology.

The precedent is clear: the first 10 negotiated Part D drugs saw average price reductions of 63%, saving Medicare an estimated $6 billion in a single year. The Congressional Budget Office projects $100 billion in Medicare savings over a decade.

But Part B pricing has deeper operational implications. These drugs are reimbursed based on Average Sales Price (ASP) plus 6%, directly tying manufacturer pricing to provider revenue. As pricing control moves upstream, the impact will cascade across procurement workflows, revenue cycles, and patient access models—turning this policy evolution into a strategic turning point.

For Pharma: The End of Traditional Pricing Power

For pharmaceutical manufacturers, the expansion to Part B signals the end of traditional pricing levers. Historically, companies have enjoyed considerable discretion in setting launch prices and adjusting them post-market. That discretion is shrinking—fast.

Drugs selected for negotiation will face significant price reductions—up to 60% in some estimates. As a result, the commercial value of high-revenue, single-source products is now exposed to federal constraint.

The downstream effects are substantial:

• Pipeline reprioritization toward areas with less Medicare exposure
• Increased investor scrutiny as pricing constraints reshape valuations
• A need to rearchitect access strategies, including rebate structures and pricing corridors

Pricing is no longer just a commercial decision, it’s a cross-functional, risk-managed capability that must be embedded into enterprise operations.

For Providers: A Squeeze on Both Ends

Providers administering Part B drugs already operate on slim margins. With negotiated pricing reducing ASP benchmarks, many will see a direct erosion of reimbursement revenue, particularly in oncology and specialty care.

CMS estimates physicians could collectively lose at least $25 billion in add-on payments between 2028 and 2032.

Providers must prepare for:

• Revenue compression across buy-and-bill therapies
• Procurement disruptions as availability and terms shift
• Patient access risk due to treatment delays or financial barriers

Succeeding under this model requires operational agility and a mindset that rethinks everything from payer contracts to patient engagement programs.

Compliance Becomes a Strategic Discipline

With negotiation authority comes a new layer of compliance complexity. Manufacturers must submit pricing data and rationale. Providers must align documentation and billing with new standards.

But compliance doesn’t have to be a burden. Done well, it becomes a strategic asset:

• Builds trust with payers and regulators
• Enables faster reimbursement cycles
• Surfaces data that supports forecasting and financial planning

Forward-thinking organizations are investing in automation and governance models that treat compliance as a living process—one that scales with evolving regulations.

Realigning Strategy Around Value, Access, and Technology

2025 is not the year for reactive adjustments. It’s the year for scenario planning, capability building, and cross-functional realignment.

For pharmaceutical companies:

• Map product portfolios to CMS risk exposure
• Strengthen evidence generation and negotiation readiness
• Rethink lifecycle and pricing strategies through a value-based lens

For providers:

• Assess reliance on high-cost, physician-administered drugs
• Engage in alternative payment model discussions
• Reinvest in care access programs and patient financial navigation

Organizations that move decisively—aligning legal, clinical, financial, and technology teams—will create competitive separation as reforms take hold.

Why Technology—and Especially Agentic AI—Matters Now

As these reforms accelerate, so does the complexity of managing them. That’s where agentic AI and modern data infrastructure step in.

Autonomous AI agents can support everything from compliance automation and contract simulation to drug pricing reconciliation and real-time reimbursement modeling. 

Integrated into a robust data architecture, these systems provide:

• End-to-end visibility into drug utilization and patient access
• Proactive risk detection across reimbursement and regulatory workflows
• Actionable insights for finance, clinical, and legal leaders to stay aligned

Organizations investing in agentic systems and scalable data strategies today are the ones who will be best equipped to navigate complexity, reduce friction, and respond with confidence tomorrow.

Making the Shift from Reactive to Proactive

This moment is about more than cost containment. It’s about reimagining how high-cost therapies are priced, delivered, and justified in a value-driven system.

The organizations that lead will not wait to be told what to do. They will:

• Build internal agility to interpret and act on regulatory change
• Operationalize data infrastructure for real-time insights and auditability
• Deploy agentic AI to simulate reimbursement impact, automate governance, and flag emerging risk
• Collaborate across the value chain to define new, equitable measures of value

The future of drug pricing is negotiated, data-informed, and AI-enabled. Organizations that modernize now will not only withstand CMS reforms—they’ll lead through them.

If you're exploring how agentic AI and digital strategy can accelerate readiness and reduce risk, start with the right partner.