CMMI introduces three new models aimed at a lower cost of medications

CMMI introduces three new models aimed at a lower cost of medications three new payment methods were introduced by the current U.S. government with the goal of bringing down the price of prescription medications, including new Medicare coverage alternatives. The three models were made available in response to President Biden’s executive order from last year, which urged the federal government to look for methods to reduce costs.

The Director of the Center for Medicare and Medicaid Innovation (CMMI), Liz Fowler stated:

“These selected models will test strategies to make it easier for Medicare patients to afford and access needed prescriptions at $2 or less, help expand access to cutting-edge cell and gene therapies for people with Medicaid, and help ensure drugs already on the market are safe and effective.”

The three models which will be examined are:

•       Development of new payment systems for medications approved for sale through a fast approval process, which is when the Food and Drug Administration (FDA) can approve medications that meet medical needs that have not been met in the past. The organization would develop new strategies to encourage medicine companies to finish confirmatory studies and to strengthen access to post-market safety and effectiveness data. This would lower Medicare expenses on medications that have no proven therapeutic value. In a confirmatory clinical trial, CMS agreed to cover a new class of Alzheimer’s disease medications for Medicare participants.
•       A list of commonly used medications for which Part D out-of-pocket expenses are limited to $2 per medication per month. According to a press release, this model aims to persuade Part D plans to reduce cost-sharing on very affordable generic pharmaceuticals that have considerable advantages, but cost-sharing might vary considerably between health plans dependent on the doctor’s prescription.
•     A plan to deal with the up to $1 million price tag for gene and cell treatments for conditions including cancer and sickle cell disease. According to CMS, the intention is for state Medicaid agencies to delegate CMS the responsibility of coordinating and administering outcomes-based cell & gene treatment agreements. 

   Fowler has assured that the medicine model won’t be available in the 2023 enrollment period and there is a high chance of its unavailability in 2024 as well. CMMI did not provide a date for when the models would be officially launched.

Additionally, the center is deciding which models will be optional and which will be required. The decision on rapid approval is still up in the air, but Fowler predicted that the gene and cell therapy approach, as well as the generic medicine model, will be free of any charges.

In terms of the fast approval process, CMMI is still determining the rewards for drug manufacturers to complete confirmatory clinical trials and to verify the product is safe for use. Several questions were raised by the media regarding the payment trend of Medicare Part B, to which the Director of CMMI gave an unclear response.

It’s still unknown which of the models will political backlash on Capitol Hill. A number of House Republicans objected in 2022 to CMS’ choice to only partially cover the class of Alzheimer’s medications.

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