Maximum Fair Price (MFP) is set to take effect on January 1, 2026, and it represents a meaningful change in how certain Medicare Part D drugs will be reimbursed. While the goal of MFP is to lower drug costs for patients, it also introduces new pricing mechanics and operational considerations for pharmacies.
Here is a high level overview of what pharmacy owners should understand as they prepare.
Why Maximum Fair Price Exists
MFP was created under the Inflation Reduction Act and allows CMS to negotiate prices for select high cost Medicare Part D medications. These negotiated prices establish a ceiling on what Medicare will pay for certain drugs. For pharmacies, this changes the reimbursement flow. Instead of receiving full payment from the PBM, reimbursement is split between the PBM and the drug manufacturer, with CMS facilitating the process.
The Three Questions Every Pharmacy Owner Should Ask
As MFP approaches, pharmacy owners should focus on three critical questions.
How will MFP impact profitability?
At the point of sale, MFP claims may appear less profitable because part of the reimbursement is received later from the manufacturer. However, when pharmacies understand WAC pricing and buying discounts, some MFP drugs may still maintain or even slightly improve margins.
How long will it take to get paid?
MFP introduces longer reconciliation cycles. Manufacturer refunds are not paid on the same timeline as PBM claims, which means more money tied up in accounts receivable and less immediate cash available for daily operations.
How will reconciliation be handled?
With CMS and manufacturers now involved, pharmacies will need to track claims through new portals and manage multiple payment sources. This adds complexity and makes reconciliation more important than ever.
How Reimbursement Flows Under MFP
When an MFP drug is dispensed, the pharmacy submits the claim to the PBM as usual. The PBM reimburses the pharmacy at the negotiated ceiling price and sends the claim to CMS. CMS validates the claim and forwards it to the manufacturer, who calculates the refund based on the difference between the Maximum Fair Price and the wholesale acquisition cost.
The manufacturer then issues the refund to the pharmacy. This process creates a delay between dispensing the medication and receiving full reimbursement, which is why cash flow planning becomes more important under MFP.
Why Preparation Matters Now
Maximum Fair Price is not just a pricing change. It is a workflow change.
Pharmacies that take time now to understand how profitability is calculated, how reimbursement is split, and how cash flow may be affected will be better positioned once MFP goes live in 2026.
Planning ahead allows pharmacy owners to reduce surprises, prepare for longer reconciliation cycles, and make informed decisions about operations and finances.
For More Resources
Download our free ebook for a deeper look at Maximum Fair Price, including reimbursement flow, cash flow considerations, and practical insights to help pharmacies prepare.
