# Drug Pricing & IRA Round 2 - Week of May 24–30, 2026 > Inaugural Drug Pricing & IRA Round 2 podcast briefing for the week of May 24–30, 2026. AbbVie reset Imbruvica's commercial WAC to MFP and it's already cascading to PBM reimbursement, Richard Pops put a number on the small-molecule pill penalty, and CMS's 2028 pool adds Part B drugs for the first time. ## Drug Pricing & IRA Round 2 ### Week of May 24–30, 2026 --- ```request-access variant: ghost heading: Want this kind of synthesis on your own coverage? buttonText: Request access ``` ## TL;DR - **Five of the ten IRA Round 1 manufacturers have already cut list price toward the maximum fair price**, AbbVie's Imbruvica is the named example, and the gross-to-net hit is flowing through *now*, not when the formal MFPs took effect in January. PBM reimbursement is being pulled down with it. Commercial books are not the safe harbor models assumed. - **Richard Pops, outgoing Alkermes CEO, put a number on the pill penalty:** clip four years off a small molecule's revenue curve and you erase *half* of lifetime revenue. He named Keytruda as the canonical playbook IRA forecloses for oral oncology. - **MFN tail risk got pushed out**, per Pops: "There is no MFN draft legislation. We don't know what MFN actually is", and unlikely this legislative session. Take the near-term de-risking; keep the long-term overhang on the board. --- ## What's new It was a quiet week on the podcast tape, only two episodes substantively addressed IRA, drug pricing, or the negotiation-exposed names. That itself is a signal: pharma communications are deliberately turned down while Round 2 negotiations are live and CMS prepares to announce the 2028 selected list. When manufacturers go silent, the operator commentary that *does* leak is worth more, not less. Both of this week's sources are insiders. **1. AbbVie has effectively reset Imbruvica's commercial WAC to MFP, and it's already cascading.** On [340B Insight's May 26 episode "How To Calculate How the IRA Will Affect 340B in 2027"](http://url7324.matterfact.com/ls/click?upn=u001.idHmPrr2Geh7KYLAsTy7NkrIVb-2FgA4pmf2rMXQwGcOhPcS0sXItRIyFucLMMR0C3TdJ6QsVG2zNLB5VcRc81dPgUKnOha6HHDr7Q7-2Bjdnt8f1gDTIybtho4JNe5vIH1rdRO1wGyjCePyzT94jyAVAg-3D-3D06-8_7mLGwmUci-2BLaXswv9WX1yTgqn3Wad-2FotHhzHgSNAZbWSzcvCTtaUx9WXzqWc31Sz25chYMNa-2FopLX7Y31C-2B9UkbYHZlESPMSaK2WtlpRW0zyR7810f-2FTffDQ641O5ZzdUahoPU-2F2h71dv07xOBUOb2hUJhrBxwTuKP7RWgC2Hcag9YDLo8X7IQzuiZuonVkLIwoS5SXptdr9oL7LcuogCQ-3D-3D), Stephen Miller (340B Health VP of Pharmacy Services) said flatly that **"half of the manufacturers for the 2026 drugs, so 5 of the 10, lowered their WAC or wholesale acquisition cost price significantly. Some all the way down to MFP."** The single drug he named: **AbbVie's Imbruvica**, where the 2027 list price has already been cut to MFP. That collapses the 340B discount to the **23.1% statutory floor** for brand drugs, and, more important for the buy side, "Insurance, PBMs are going to max the reimbursement down to that rate as well." Commercial revenue follows Medicare, not the other way around. > "Some of the savings will disappear completely." > Stephen Miller, 340B Health, [340B Insight, 2026-05-26](http://url7324.matterfact.com/ls/click?upn=u001.idHmPrr2Geh7KYLAsTy7NkrIVb-2FgA4pmf2rMXQwGcOhPcS0sXItRIyFucLMMR0C3TdJ6QsVG2zNLB5VcRc81dPgUKnOha6HHDr7Q7-2Bjdnt8f1gDTIybtho4JNe5vIH1rdRO1wGyjCePyzT94jyAVAg-3D-3D7bj7_7mLGwmUci-2BLaXswv9WX1yTgqn3Wad-2FotHhzHgSNAZbWSzcvCTtaUx9WXzqWc31Sz25chYMNa-2FopLX7Y31C-2B9Um9NtAje-2Fj7aW5vVoigdN4si0G2ZOSz1wMYUPAlKoCh909iArkpC8HJ4uGOl39ArDUbw-2Fm9pJWGOIVP4KwvX-2FR1pXxAWx6p2tJWEx1rCn6tIr1W7hDK-2FiMj5M-2BlCgqnDdQ-3D-3D) **2. Pops on the pill penalty as a capital allocation problem, not a policy debate.** On [The BioCentury Show's May 28 episode "Ep. 110, Richard Pops on Three Decades in Biotech: Drug pricing, FDA and China"](http://url7324.matterfact.com/ls/click?upn=u001.idHmPrr2Geh7KYLAsTy7NkrIVb-2FgA4pmf2rMXQwGcOjJXhvpYveY16Y92Y6YhjDKiNIF-2F6WxA36RGbxL9WMR0pGBV3NDA1wi3V83t2z0pppLMQ64-2B-2BUUEhVnaGD9LBpa0NMH-2F5yQzVzZnrGGkUraGQ-3D-3DG7rF_7mLGwmUci-2BLaXswv9WX1yTgqn3Wad-2FotHhzHgSNAZbWSzcvCTtaUx9WXzqWc31Sz25chYMNa-2FopLX7Y31C-2B9UmOKGVuUoChyHqcmWZSqxaK2xMEszqPjOmmPrHQ6uJXAJN6bQRUCS77m0U-2FvXIiIz-2FvRWzx2pMKGvIuTmpKmjPw1UkyKxnfzK8Hisx71D9NTlwanlK4LjW3dExHuXfQzxQ-3D-3D), the outgoing Alkermes CEO and former BIO chair framed it in numbers: *"If you draw a curve of the revenue profile of a drug over its life… and you clip off the back four years, that's half of the revenues. So from a purely economic perspective, you should develop biologics instead of small molecules."* He named Merck/Keytruda as the playbook IRA breaks for small molecules: *"What you can't do is what Keytruda and Merck did, which is invest over a decade in indication after indication… you light a fuse, it's a nine-year fuse."* Read that twice if you cover MRK's oral pipeline. **3. The 2028 selected list quietly broke a fence.** Per the same 340B episode, CMS's 2028 negotiation pool **includes Part B drugs for the first time**, the oncology injectables and physician-administered franchises that the Street historically modeled as insulated from IRA. The list of names CMS may target is still pending, but the framework is now established. If you're long Keytruda, Tagrisso, or any Part B-administered franchise on the "biologics get 13 years, and Part B is safe" thesis, that second clause just got softer. **4. Inflation-penalty dodge is in.** Miller flagged that 2026 list-price increases on drugs subject to 2027 negotiation came in at **0–6%, most in the 2–4% band**, engineered to stay under the inflation rebate trigger. Translation: don't expect a 2026 list-price tailwind to bail anyone out before MFPs hit. **5. Cat-phase liability is real, even for the big caps.** Pops disclosed that Part D redesign moved Alkermes' manufacturer liability in the catastrophic phase from 0% to a phase-in toward 20%, *"It would have taken us from being profitable to being not profitable."* Mid-cap pain is the canary. For JNJ/PFE/MRK, it's modeled, but it's also why 2026 EPS guides have been so carefully hedged. --- ```request-access variant: inline heading: Want this kind of synthesis on your own coverage? buttonText: Request access ``` ## The debate **Manageable headwind (steel-man):** IRA is the most studied policy event in pharma history. Bear cases have been priced since 2022. The $2,000 Part D OOP cap is *expanding* volumes, adherence improves, abandonment falls, especially on chronic cardio-metabolic. Mix shift to biologics and obesity is doing the lifting (LLY/NVO), and Round 1 caps a known fraction of revenue at known prices. Pipelines (LLY orforglipron, MRK subcutaneous Keytruda, ABBV post-Humira immunology) are the offset. We've been here. **Structural compression (steel-man):** Round 2 plus the Imbruvica template means MFP is not a Medicare-only event, it's a commercial WAC reset, repriced by PBMs in real time. Add Part B drugs to the 2028 pool and the "biologic safe harbor" cracks. Pops's pill-penalty math is not opinion; it is the discount rate small-molecule programs now get inside R&D committees. If the EPIC Act doesn't pass, the cost of capital for oral oncology has structurally repriced, and MFN, even pushed out, is the unpriced tail. The honest read: the bull case has been right for two years on share price; the bear case is right on the underlying earnings algorithm. Round 2 is where those reconcile. --- ## Stocks in play - **ABBV**: *Directly named this week.* **Bull:** Imbruvica is a known declining asset; ex-Humira immunology (Skyrizi/Rinvoq) is the real story; mgmt has historically been disciplined. **Bear:** the Imbruvica WAC cut means commercial gross-to-net deteriorates faster than models, and it's the template for Venclexta and Linzess in subsequent rounds. **Watch:** Q2 26 Imbruvica revenue print, and the 340B ceiling-price disclosure two quarters out, early read on which other manufacturers are following AbbVie's template. - **MRK**: *Named via Keytruda as the pill-penalty paradigm.* **Bull:** subcutaneous Keytruda preserves the franchise past LOE; Part B safety has been the assumption. **Bear:** any small-molecule Keytruda follow-on or oral formulation now compounds at a 9-year clock; Part B drugs enter the negotiation universe in 2028. **Watch:** CMS's 2028 list announcement, and any oral Keytruda program disclosure at upcoming ASCO/ESMO. - **JNJ, BMY, PFE, LLY, NVO, AZN**: Not named on tape this week, but all sit in the same MFP cohort or Round 2 candidate pool. Stelara (JNJ) and Eliquis (BMY/PFE) are Round 1 and the Imbruvica template applies. **Watch (all):** 340B ceiling-price disclosures Q3–Q4 26, they lag list-price moves by two quarters and are the earliest public tell on commercial spillover. --- ```request-access variant: inline heading: Want this kind of synthesis on your own coverage? buttonText: Request access ``` ## Read-throughs - **PBMs / managed care (CVS, CI, UNH):** if reimbursement gets reset to MFP across the commercial book, the gross-spread economics that financed the rebate model compress. Watch utilization-management commentary for the offset. - **Biosimilars / generics (TEVA, organic biosim entrants):** branded WAC near MFP narrows the price gap, bad for biosim launch economics. - **R&D mix:** expect more biologics and modality-shifted programs (radioligands, ADCs, GLP-1 peptides) on conference call portfolio reviews; oral small-molecule programs increasingly justified on ex-US economics. - **Ex-US launches:** with US MFPs as the new ceiling and MFN policy floating, expect *earlier* ex-US launch sequencing and tougher EU/UK/Japan price defense than the 2023–24 norm. --- ## What changed vs last week Inaugural issue, no prior week to compare against. Going forward, expect a "vs last week" delta on the EPIC Act, MFN policy status, and any new CMS list confirmations. --- ## Sources - [340B Insight, "How To Calculate How the IRA Will Affect 340B in 2027"](http://url7324.matterfact.com/ls/click?upn=u001.idHmPrr2Geh7KYLAsTy7NkrIVb-2FgA4pmf2rMXQwGcOhPcS0sXItRIyFucLMMR0C3TdJ6QsVG2zNLB5VcRc81dPgUKnOha6HHDr7Q7-2Bjdnt8f1gDTIybtho4JNe5vIH1rdRO1wGyjCePyzT94jyAVAg-3D-3DnRmJ_7mLGwmUci-2BLaXswv9WX1yTgqn3Wad-2FotHhzHgSNAZbWSzcvCTtaUx9WXzqWc31Sz25chYMNa-2FopLX7Y31C-2B9UlwkYQVBhZmMOmpLY2usrxb273K8M40oJFfWzA57b2NrDqmOzos-2FSD1zw4BQpqKYzr7mVBiTrfM3uT1rGG-2FnkpC0s5jcH-2Fid5LBA4GlLsOC03tleIAUfC6NqgNMFZ0HFow-3D-3D) (2026-05-26), David Glendening and Stephen Miller, 340B Health (operator/insider). - [The BioCentury Show, "Ep. 110 - Richard Pops on Three Decades in Biotech: Drug pricing, FDA and China"](http://url7324.matterfact.com/ls/click?upn=u001.idHmPrr2Geh7KYLAsTy7NkrIVb-2FgA4pmf2rMXQwGcOjJXhvpYveY16Y92Y6YhjDKiNIF-2F6WxA36RGbxL9WMR0pGBV3NDA1wi3V83t2z0pppLMQ64-2B-2BUUEhVnaGD9LBpa0NMH-2F5yQzVzZnrGGkUraGQ-3D-3Dg5Mr_7mLGwmUci-2BLaXswv9WX1yTgqn3Wad-2FotHhzHgSNAZbWSzcvCTtaUx9WXzqWc31Sz25chYMNa-2FopLX7Y31C-2B9Uu3hQbh-2Bd6ypJwztCTi6nK5ai6XbAPvGfpq6Yujy4OIT7GLoZhVTO00GLbZ7yCQ8Yj-2FqfLqko3pu02pIcrXyRC83Oj9TRTC5ChMD1aENFw8Lm21dZ7aBgezjbW79c1nNtA-3D-3D) (2026-05-28), Steve Osden interviewing Richard Pops, outgoing CEO Alkermes, former BIO chair (operator/insider). *Disclaimer: This newsletter compiles podcast-sourced commentary and is not investment advice. Episode quotes are reproduced verbatim from publicly available podcasts; any errors are mine.* ```request-access variant: banner heading: Run your own corpus. description: matterfact is deployed with select institutional partners. Request access to run it on your own coverage. buttonText: Request access ```