Three Models Testing Ways to Lower Drug Costs Outlined in Health and Human Services Report

February 16, 2023

On February 14, 2023, the Centers for Medicare & Medicaid Services (CMS) announced that the Secretary of the Department of Health and Human Services (HHS) selected three models aiming to address high prescription drug costs for testing by the Center for Medicare and Medicaid Innovation (CMMI). This effort to identify ways to lower drug costs in United States comes in response to President Biden’s Executive Order, “Lowering Prescription Drug Costs for Americans,” which complements provisions in the Inflation Reduction Act (IRA).

The models are:

1.The Medicare High-Value Drug List Model (“The Medicare $2 Drug List”). Under this model, Medicare Part D plans would be encouraged to offer a low, fixed co-payment for a standardized list of generic drugs that treat chronic conditions across all cost-sharing phases of Part D.

Implementation and Timeline: “CMS could explore leveraging existing systems, which would allow for a streamlined implementation. The Secretary directs CMS to request input from stakeholders (e.g., beneficiaries and their advocates, Part D Sponsors, manufacturers, and providers) and announce the Model specifications in advance of a Model start date, as soon as operationally feasible.”

2.The Cell and Gene Therapy Access Model. Under this model, state Medicaid agencies would assign CMS to coordinate and administer multi-state, outcomes-based agreements with manufacturers for certain cell and gene therapies.

Implementation and Timeline: “The Secretary directs CMS to begin model development in 2023, consider announcing the model specifications in 2024-2025, and launch the model test as early as 2026. CMS should consider starting the CGT Access Model with a single therapeutic indication, such as sickle cell disease. If improvements in beneficiary access, clinical outcomes, and cost are documented, the Secretary would evaluate additional therapeutic indications.”

3.The Accelerating Clinical Evidence Model. Under this model, CMS would develop payment methods for drugs approved under accelerated approval, in consultation with the Food and Drug Administration (FDA), to encourage timely confirmatory trial completion and improve access to post-market safety and efficacy data.

Implementation and Timeline: “The Secretary directs CMS to begin consultation with FDA to explore the Accelerating Clinical Evidence Model in 2023, and if determined appropriate, continue development thereafter with a targeted launch as soon as feasible. To promote stakeholder engagement, the Secretary may direct CMS to publish an Advance Notice of Proposed Rulemaking after Model development and before engaging in rulemaking.”

For additional information, please see the associated report, FAQs, and fact sheet.

The Association for Clinical Oncology (ASCO) will comment on these CMMI models at every appropriate opportunity and stands willing to work with HHS on the development and implementation of models that work best for individuals with cancer.

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