Next week I’m joining Cencora for a webinar (sign up), followed by presenting at Access USA in Philadelphia and then, off to Vegas, for Asembia.
If you’ll be in Philly or Vegas, I’d welcome a conversation about what’s truly consequential right now and what isn’t. Coffee or Paper Planes (IYKYK) optional.
Quieter week around here for news so let’s keep this quick…
I’d Prefer Not. On Wednesday, Drug Channels published new analysis using enrollment data to map what Part D pharmacy networks actually look like heading into 2026.
Eighty-three percent of seniors are still in standalone Part D plans with preferred pharmacy networks, basically flat from 2025 but well down from the 2023 peak. Albertsons and Publix show up as preferred across every major plan. Walgreens is holding. Walmart, which invented the preferred-network model in Part D, is now in the middle of the pack. And independents, through their pharmacy services administrative organizations (PSAOs), are largely walking away from preferred status because, well, economics.
Now layer in what Congress just passed. The Consolidated Appropriations Act of 2026, signed February 3rd, requires that any pharmacy willing to meet plan terms must be allowed into Part D networks. CMS must define what “reasonable and relevant” contract terms mean, and pharmacies get a formal appeals process if they think they’re being excluded unfairly. That’s an (eventual) constraint on how aggressively plans can engineer preferred tier access going forward.
For manufacturers, this is a fill behavior story. Low Income Subsidy (LIS) enrollment is growing, and LIS beneficiaries can use any network pharmacy without the preferred cost differential, which means preferred status is already mattering less for a bigger slice of your patients. Add any-willing-pharmacy rules on top, and the whole architecture of preferred-network influence is under pressure. As we look ahead, map where scripts are actually landing now, and plan accordingly
Why Would Anyone Be Anxious? The proportion of American adults taking anxiety medication jumped from 11.7% in 2019 to 14.3% in 2024, that’s 8 million more people, now totaling 38 million, with sharp increases among young adults, college graduates, and LGBTQ+ adults.
Short and Sweet. The National Pharmaceutical Council has some great fact sheets out including one on the Inflation Reduction Act and orphan drug designations.
The Fundamentals – Medicare Advantage, Market Economics
The Medicare Advantage market didn’t collapse in 2026, but it sure as heck got reorganized. Total enrollment still grew by about 1.1 million people to roughly 35 million beneficiaries. The story is what happened to get there.
One in ten MA enrollees got kicked off their plan heading into 2026 because their insurer exited the market. That’s about 2.9 million people who had to scramble during open enrollment. The forced disenrollment rate hit 10% this year, up from 6.9% in 2025 and a tenfold jump from the historical average of about 1% between 2018 and 2024.
This is what market correction looks like when it happens fast. After nearly two decades of aggressive growth, MA plans hit the brakes. MA plans work by taking capitated payments based on expected risk and then trying to manage care to come in under that number. When medical costs run hotter than expected and payment updates don’t keep pace, margins compress. Plans respond by exiting unprofitable counties, cutting benefits, raising cost sharing, or all three.
In late January, CMS proposed a net 0.09% payment increase for 2027. That headline number isn’t the same as the effective growth rate, which came in at 4.97% and that’s the number that actually drives benchmark trends underlying plan bids. A flat headline rate on top of a medical cost trend that isn’t cooperating means plans are essentially being asked to absorb the gap. Insurers argue the overall package still understates real utilization pressure, especially post-pandemic.
The industry response has been loud. Insurers warn of higher out-of-pocket maximums, benefit cuts, and further market exits. The timing isn’t subtle either: plans are setting their 2027 benefit packages right as the next open enrollment season approaches, in a political year where MA disruption becomes campaign material. CMS counters that the market remains stable, premiums are down on average, and nearly all beneficiaries still have access to at least one plan.
Both things can be true. Enrollment grew, but growth slowed to the 3% range versus the historic 7% to 10% clip. Premiums fell on average, but plenty of plans trimmed supplemental benefits or shifted cost sharing in ways that are very real to beneficiaries.
And then there’s this … special needs plans added nearly 900,000 enrollees and now represent about 23% of total MA enrollment, up from 21% a year ago. SNPs can target dual eligibles and people with chronic conditions, which supports tighter care management, higher risk scores, and more predictable utilization. When general enrollment plans are shedding members, SNPs are growing. That’s where plans are signaling they can still make the math work.
The forced disenrollment patterns aren’t random either. Beneficiaries in PPOs, non-SNP plans, plans from smaller carriers, and lower-rated plans bore the brunt of exits. Rural counties got hit about twice as hard. Those are signals about which business models and geographies can’t sustain current payment levels.
When MA plans can’t make the math work, they either exit or shift costs. Beneficiaries see higher cost sharing. Providers face narrower networks. And manufacturers deal with tighter management and more restrictive access policies. The 2027 payment update won’t be finalized until April, which gives plans time to push for revisions.
Even if CMS tweaks the final rate or phases in risk model changes, the underlying tension is still here: MA saturated faster than expected, medical costs are climbing, and policymakers want to slow spending growth. Double-digit growth masked the sustainability question for years. Now it’s front and center, and 2.9 million beneficiaries just felt the pain of it.
