HHS Releases Report on CMMI Models to Lower Drug Costs, Announces Selection of Three Models

Models will focus on accelerated approval drugs, cell and gene therapy, and Part D generic drugs

On February 14, the Centers for Medicare & Medicaid Services (CMS) announced that the Secretary of the Department of Health and Human Services (HHS) has selected three new models for testing by the CMS Innovation Center (CMMI). The models are intended to help lower high drug costs of drugs with the goal of promoting accessibility to life-changing drug therapies, and improving quality of care. The report comes in response to the Executive Order issued by President Biden on October 14, 2022.

The three selected models are: 

• Accelerating Clinical Evidence Model: This model would test whether targeted payment adjustments for accelerated approval drugs incentivize timely confirmatory trial completion; the Model would be mandatory for Medicare Part B fee-for-service providers CMS is directed to begin consultation with FDA to explore development of this model in 2023 and, if determined appropriate, continue development thereafter with a targeted launch as soon as feasible.
• Medicare High-Value Drug List Model: Under this model, Medicare Part D sponsors would offer approximately 150 generic drugs for common chronic conditions, such as hypertension, with a maximum co-payment of $2 for one-month supply to test whether access to a standard list of high-value at stable, predictable copayments increases adherence and improves outcomes.
• Cell & Gene Therapy (CGT) Access Model: Under this Model, CMS would test whether a partnership amongst drug manufacturers and state Medicaid agencies on an outcomes-based agreement can help Medicaid beneficiaries gain access to cell and gene therapies. The goal is to create an alternative financing approach that helps mitigate the cost of expensive one-time therapies on State Medicaid agencies with high cost-sharing. Model development would begin in 2023 and launch as early as 2026.

The Secretary has also directed CMMI to continue to evaluate potential models in:

• Accelerating Biosimilar Adoption: The Secretary directs CMMI to continue investigating options to improve biosimilar adoption.  Areas of consideration include: 1.) aligning biosimilar cost-sharing and payment incentives for providers and beneficiaries; 2) creating shared savings arrangements and/or payment bundles for therapeutic classes; and 3) adjusting payment methods to increase competition and promote investment in biosimilar development.
• Data Access Changes to Support Price Transparency:  The Secretary directs CMMI to continue exploring opportunities to encourage price transparency for prescription drugs, building on efforts made in the CMS Interoperability and Patient Access Final Rule and Transparency in Coverage Final Rule.
• Cell and Gene Therapy Access in Medicare Fee-for-Service:  The Secretary directs CMMI to consider potential Medicare fee-for-service options to support CGT access and affordability, to complement the Medicaid-focused Cell and Gene Therapy Access Model.

We are continuing to read through all the materials and will follow-up with more details.

To read the full report, CLICK HERE.

To read the fact sheet, CLICK HERE.

To read the Frequently Asked Questions, CLICK HERE.