May 21, 2010--The Centers for Medicare & Medicaid Services (CMS) today issued new guidance to Part D plan sponsors to guarantee that Medicare beneficiaries enrolled in Part D prescription drug plans will see 50 percent savings on their brand name and some authorized generic drugs when they enter the coverage gap, or donut hole, during 2011.  

In a notice in the Federal Register, CMS also issued the draft model agreement that drug manufacturers of applicable Part D drugs will sign in order to participate in the discount program.   These agreements with manufacturers represent an unprecedented partnership to help millions of Medicare beneficiaries. Discounts will apply when the beneficiary reaches the coverage gap.  Eligible beneficiaries will see the discount when they buy their drugs at their local pharmacy counter.  

CMS will host a public meeting on June 1 to discuss and collect public feedback about the draft manufacturer agreement, and to gather feedback about the final Part D guidance released today.   As part of the June 1 meeting, CMS is encouraging drug manufacturers, Part D plan sponsors, and representatives from the beneficiary advocacy community to provide input and comments.  All stakeholders can register online at: 

Closing the coverage gap is an important part of the Patient Protection and Affordable Care Act of 2010, (the Affordable Care Act) signed by President Obama earlier this year, beginning with a one-time check for $250 in 2010 for those that reach the donut hole in 2010 and are not eligible for low-income assistance, the 50 percent discount for brand-name and some authorized generic drugs beginning in 2011 and additional savings until drugs are covered throughout the coverage the gap by 2020. 

"The documents we are releasing today facilitate the implementation of the Affordable Care Act's provisions to help Medicare beneficiaries with the high costs of their prescription medicines," said CMS Deputy Administrator and Director of the Center for Medicare Jonathan Blum.  

The Part D plan guidance released today was finalized after receiving comments on the draft guidance that was issued on April 30. This guidance clarifies how the discount program will be implemented and that CMS will coordinate the manufacturers' reimbursement for discount payments that Part D sponsors provide on their behalf to applicable beneficiaries under this program through a third-party administrative contractor.  The third-party administrator will also help to verify the accuracy of the manufacturer discounts reported by Part D sponsors.


For more information on this program, see the Federal Register notice that will be displayed on May 21, 2010 at: 

Or visit