Biden-Harris Administration Takes Next Step on Proposed Model to Lower Prescription Drug Costs for People with Medicare

CMS Seeks Feedback on Medicare $2 Drug List Model, Sample $2 Drug List, and Outreach

Today, the U.S. Department of Health and Human Services (HHS), through the Centers for Medicare & Medicaid Services (CMS), released a Request for Information (RFI) and a sample list of prescription drugs that the agency preliminarily intends to include under the proposed Medicare $2 Drug List Model, which was developed in accordance with President Biden’s Executive Order 14087, “Lowering Prescription Drug Costs for Americans”. Under the model, people enrolled in a participating Medicare prescription drug coverage (Part D) plan would have access to these drugs for a low, fixed copayment of no more than $2 for a month’s supply per drug. The model would provide individuals more certainty about the out-of-pocket costs for these generic covered Part D drugs that would target common conditions, such as high cholesterol and high blood pressure. CMS issued this RFI to support continued development of the model.

“We want generic drugs for common chronic conditions to be affordable for people on Medicare.  Reliably low copayments for essential generic drugs make it more likely that seniors and people with disabilities can afford the drugs they need to stay healthy,” said HHS Secretary Xavier Becerra. “This is the latest action taken by President Biden and Vice President Harris to lower drug costs. This Administration has already capped the cost of insulin, made vaccines available at no cost for people with Medicare, and now is, for the first time in history, ensuring Medicare has the power to negotiate lower prescription drug costs for seniors – and we will continue to do everything we can to make health care more affordable and accessible for everyone.”

“CMS is using every lever at its disposal to ensure people with Medicare have access to lower-cost prescriptions,” said CMS Administrator Chiquita Brooks-LaSure. “The Medicare $2 Drug List Model will aim to help improve access to and affordability of low-cost generic drugs for people with Medicare prescription drug coverage, and we encourage the public to provide feedback on the model.”

The Center for Medicare and Medicaid Innovation’s (Innovation Center’s) Medicare $2 Drug List Model aims to test whether a simplified approach to offering low-cost, clinically important generic drugs can improve medication adherence, lead to better health outcomes, and improve satisfaction with the Part D prescription drug benefit among people with Medicare and prescribers.

The generic drugs under consideration for inclusion in this model would not be subject to utilization management requirements (except for safety-related requirements) at any network pharmacies. Participation in the model would be voluntary for Part D sponsors and, pending further development, could start as early as January 2027.

“The initial version of the $2 Drug List represents a starting point for the drug list that would be included in the model,” said Liz Fowler, CMS Deputy Administrator and Director of the Innovation Center. “CMS intends to include many drugs that are used to treat common conditions for people with Medicare, with periodic updates to the drug list once it is finalized.”

The Innovation Center incorporated numerous data sources in a quantitative and clinically driven process to develop the sample drug list. The information was then reviewed with an external technical expert panel that included physicians, pharmacists, and health policy experts. Their input helped inform the sample list of drugs presented in this RFI.

The idea of a standardized “drug list” with predetermined out-of-pocket costs is already well understood by individuals and providers. Many large retail pharmacies and grocery chains have successfully offered defined lists of prescription generic drugs at low, fixed prices. The Innovation Center’s approach in the proposed Medicare $2 Drug List Model is informed by these options, building on the concept of standardization but tailoring the approach to the needs of people with Medicare. This model aims to include a sufficiently comprehensive list of covered Part D drugs so that when a person with Medicare is prescribed a covered Part D drug, most of the time, there will be a treatment option that may be suitable for their condition available on the $2 Drug List.

New generic drug launches, changing clinical indications, and trends in pricing will necessitate updates to the $2 Drug List, both prior to the launch of the model and at regular intervals during the lifespan of the model. The Innovation Center is seeking feedback on this ongoing update process through the RFI and intends to continue incorporating feedback from interested parties.

Details on the Medicare $2 Drug List Request for Information can be found at: https://www.cms.gov/priorities/innovation/innovation-models/medicare-two-dollar-drug-list-model. Additional details on the Medicare $2 Drug List Model were also released in October 2023 in the “CMS Innovation Center’s One-Year Update on the Executive Order to Lower Prescription Drug Costs for Americans” blog post.

Information on how to submit comments can be found at: https://surveys.cms.gov/jfe/form/SV_40iDHQWMNuVfyGq. Comments must be submitted by December 9, 2024, and will only be accepted through the link above.