CMS rolls out proposed generic drug list to ease cost-sharing burden

The Centers for Medicare & Medicaid Services (CMS) released a list of prescription drugs it hopes to include in its new Medicare $2 Drug List Model, the agency announced Wednesday.

Designed to limit out-of-pocket costs, the plan caps a generic drug’s monthly price at $2. Drugs included in the list help tackle conditions like high cholesterol and blood pressure, but cost-sharing is not uniform across insurance plans due to formulary differences. The voluntary model motivates Part D plans to offer a low, fixed price so cost-sharing fluctuations are eliminated.

CMS is looking for feedback on the sample list with a Request for Information (RFI) from stakeholders to see if it will lead to more medication adherence and improved health outcomes, a news release said.

“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 in a statement. “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.”

Drugs on the list include Bupropion, Metformin, Penicillin and Prednisone. They are not subject to prior authorization or step therapy except when meeting safety requirements. It’s the government’s hope that the list will soon include nearly all Part D-covered drugs, but the list will require updating as pricing trends change and new drugs are developed.

An analysis of Part D sponsors during the 2023 plan year found just 20.5% of Part D beneficiaries are in health plans that offer a similar level of benefit. Drugs also varied “considerably” across formularies, CMS explained.

“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 Center for Medicare and Medicaid Innovation, in the news release. “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.”

It is just one of three models CMS is testing after President Biden issued an executive order in 2022. The order paved the way for the Cell and Gene Therapy Access Model and the Accelerating Clinical Evidence Model.

Part D plans can voluntarily join the model, which could start no sooner than January 2027. The RFI closes on Dec. 9.