Can a drug manufacturer just refuse to negotiate with Medicare?

Legally, yes, but the law attaches a steep financial penalty to non-participation, which is why every manufacturer of every drug selected so far has chosen to sign rather than decline.

Does universal participation mean the program is working as intended?

It confirms the penalty structure is effective at securing participation. Whether the negotiated prices themselves represent CMS's maximum possible leverage, and how manufacturers adjust other pricing or research decisions in response over time, are separate questions this brief does not resolve.

health · 2022 to 2026

Medicare's Take-It-or-Leave-It Price

For the first time, federal law lets Medicare negotiate drug prices directly. The manufacturers technically have a choice, but the law made the alternative to negotiating so costly that every one of them chose to sit down.

Facts verified as of July 2026.

The Medicare Drug Price Negotiation Program, created under the Inflation Reduction Act, selected its first 10 Part D drugs for negotiation, with negotiated prices taking effect January 1, 2026. Measured against 2023 net Medicare spending, the negotiated prices would have saved an estimated 6 billion dollars, a 22 percent reduction in net spending on those drugs [VERIFIED].

In January 2026, CMS announced a second round covering 15 additional drugs, including Part B drugs for the first time, with negotiated prices set to take effect in 2028. CMS estimated these negotiations would save an additional 12 billion dollars relative to 2024 net prices, a 44 percent reduction [PROJECTED].

Play the same structure: The Signing Deadline.

Sources

[VERIFIED] The first 10 negotiated Part D drug prices took effect January 1, 2026, with estimated savings of 6 billion dollars, a 22 percent reduction, against 2023 net spending. Centers for Medicare and Medicaid Services, Medicare Drug Price Negotiation Program: Negotiated Prices for Initial Price Applicability Year 2026
[VERIFIED] CMS selected 15 additional drugs, including Part B drugs for the first time, for a third negotiation cycle with a February 28, 2026 manufacturer participation deadline. Centers for Medicare and Medicaid Services, CMS Announces Selection of Drugs for Third Cycle of Medicare Drug Price Negotiation Program
[VERIFIED] All manufacturers of the third-cycle selected drugs chose to sign participation agreements. Centers for Medicare and Medicaid Services, CMS Announces Manufacturer Participation in Third Cycle of Medicare Drug Price Negotiation
[VERIFIED] The Medicare Drug Price Negotiation Program is the first time federal law has authorized direct price negotiation for certain high-expenditure single-source drugs. KFF, Key Facts About Medicare Drug Price Negotiation