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CMS Plans Three New Payment Models to Lower Prescription Drug Costs

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The Centers for Medicare & Medicaid Services (CMS) announced it plans to test three new models in an effort to lower prescription drug costs. This is in response to President Biden’s Executive Order 14087, “Lowering Prescription Drug Costs for Americans.”  

Once they are fully developed, the models will be tested through CMS’ Center for Medicare and Medicaid Innovation. CMS did not include a timeline for when these models will begin. 

The models include: 

Cell and Gene Therapy Access  

This model seeks to expand access and reduce the cost of cell and gene therapies for Medicaid beneficiaries. Under the model, state Medicaid agencies would assign CMS to coordinate and administer multi-state, outcomes-based agreements with manufacturers for certain cell and gene therapies. The arrangements would pay manufacturers based on the effectiveness of their treatments.  

Accelerating Clinical Evidence  

The model would adjust Medicare Part B payment amounts for accelerated approval program drugs to give manufacturers an incentive to expedite and complete confirmatory clinical trials. CMS would develop payment methods for drugs approved under accelerated approval, in consultation with the U.S. Food and Drug Administration, to encourage timely confirmatory trial completion and improve access to post-market safety and efficacy data. 

Medicare High-Value Drug List  

Under this model, Medicare Part D 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. 

Additional information is available in a CMS fact sheet and frequently asked questions.