Washington, D.C.—CMS is planning to employ three new models to test ways to help lower the high cost of drugs, promote accessibility to life-changing drug therapies, and improve quality of care.

The announcement was in response to an executive order by President Joe Biden, “Lowering Prescription Drug Costs for Americans,” which complements the historic provisions in the Inflation Reduction Act of 2022 that will lower prescription drug costs.

“Prescription drug prices in the United States are the highest in the developed world, resulting in affordability and access challenges,” said CMS administrator Chiquita Brooks-LaSure. “The prescription drug law is making lifesaving prescription drugs more affordable for millions of people who have Medicare, and through the selected models, the Innovation Center will lower prescription drug costs and improve access for people with Medicare and Medicaid, ranging from $2 access to certain generic drugs to better deals for expensive new therapies.”

The three models selected for testing by the CMS Innovation Center include:

• The Medicare $2 Drug List: Many relatively inexpensive generic medications that have significant clinical benefits exist for chronic conditions such as high blood pressure or high cholesterol, according to government officials, who point out that cost-sharing can vary widely across insurance plans based on the specific formulation a doctor prescribes. Under the model (the Medicare High-Value Drug List Model), Part D Medicare plans would be encouraged to offer a low, fixed copayment across all cost-sharing phases of the Part D drug benefit for a standardized Medicare list of generic drugs that treat chronic conditions. “Patients picking plans that participate in the model will have more certainty that their out-of-pocket costs for these generic drugs will be capped at a maximum of $2 per month per drug,” CMS pointed out.
• The Cell and Gene Therapy Access Model: While cell and gene therapies are an emerging area of new drug development that holds significant potential, the therapies can cost $1 million or more. Under this model, state Medicaid agencies would assign CMS to coordinate and administer multistate, outcomes-based agreements with manufacturers for certain cell and gene therapies. “As new therapies come to market, this will help Medicaid beneficiaries gain access to potentially life-changing, high-cost specialty drugs for illnesses like sickle cell disease and cancer,” according to the press release.
• The Accelerating Clinical Evidence Model: “Some drugs are approved before they have established evidence of improvement in a clinical endpoint, which is called accelerated approval,” according to CMS. It is seeking to develop payment methods for drugs approved under accelerated approval, in consultation with the FDA, “to encourage timely confirmatory trial completion and improve access to post-market safety and efficacy data. This would reduce Medicare spending on drugs that have no confirmed clinical benefit.”

No information was provided on how or when the models will be tested.

“Prescription drug prices in the United States are higher than in other comparable countries,” according to an HHS Fact Sheet. “The elevated prices result in affordability and access challenges for millions of Americans. In the past year, 3 in 10 American adults reported not taking their medications as prescribed due to cost. The underlying causes of high prescription drug prices are well documented and include market failures, such as lack of price and data transparency, and misaligned financial incentives for providers and others in the drug supply chain, which allow the growth of prescription drug prices to outpace inflation. These high prices can force Americans to make difficult choices between paying their household expenses and rationing their medication doses or, worse yet, not filling their prescriptions at all. Medication nonadherence is strongly correlated with poor health outcomes and preventable medical costs.”

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