On October 9, the Centers for Medicare & Medicaid Services (CMS) Innovation Center, issued a Request for Information (RFI) about the Innovation Center’s proposed Medicare $2 Drug List Model (the M2DL Model), which aims to test whether offering low-cost, clinically important generic drugs can improve medication adherence, lead to better health outcomes, and improve satisfaction with the Medicare Part D prescription drug benefit. The RFI includes a sample list of prescription drugs that it intends to include and seeks input from healthcare stakeholders on the sample list of drugs and other features (i.e., outreach efforts and maximizing stakeholder participation) of the model. Comments in response to the RFI may be submitted through the Innovation Center’s online survey portal by December 9, 2024.
Background
In February 2023, the Department of Health and Human Services (HHS) initially announced the model by releasing a report, in response to President Biden’s Executive Order (EO) 14087, “Lowering Prescription Drug Costs for Americans.” The EO directed the Secretary of HHS to consider and select for testing new Innovation Center health care payment and delivery models that would lower drug costs and promote access to innovative drug therapies for Medicare and Medicaid beneficiaries. It states that these models should lead to lower cost-sharing for commonly used drugs and support value-based payment that promotes high-quality care.
The HHS report outlines CMS’ plans to address prescription drug affordability and improve the quality of care for Medicare beneficiaries as directed by the EO. In the report, CMS stated that the model would build upon provisions enacted by the Inflation Reduction Act of 2022 (IRA) to reduce prescription drug prices, including the provision that would limit annual Part D out-of-pocket costs to $2,000. In addition to the M2DL Model, CMS identified two other models, the Cell & Gene Therapy Access and Accelerating Clinical Evidence models, that it will test to further address prescription drug spending in Medicaid and Medicare.
Medicare $2 Drug List Model
Under the M2DL Model, Medicare Part D sponsors are able to offer a standard set of generic drugs at a fixed copayment of up to $2 for a month’s supply and up to $5 for a three-month supply across all cost-sharing phases of the Part D prescription drug benefit (up to the out-of-pocket limit) for a beneficiary in a participating plan.
The RFI proposes a number of medications on the $2 Drug List, which target common conditions among Medicare beneficiaries, that would not be subject to utilization management requirements (except for safety-related requirements) at any network pharmacy. Participation in the model would be voluntary for Part D sponsors, including those offering both Medicare Advantage Prescription Drug (MA-PDs) plans and Standalone Prescription Drug plans (PDPs). The RFI’s sample $2 Drug List includes 101 drugs covering therapeutic uses across 15 clinical categories, including blood pressure/cardiovascular, cholesterol, diabetes, and substance use and mental health drugs.
The Innovation Center states that the RFI represents a starting point for the development of the M2DL Model which could begin as early as January 2027. It requests feedback on a number of issues by outlining the following key questions for interested parties:
- $2 Drug List Development Process: Are there additional data sources, criteria, or considerations the Innovation Center should consider in developing future versions of the $2 Drug List?
- Maximizing Plan Participation: What factors may inform the decision by Part D sponsors to participate or not participate in this model? To maximize beneficiary, prescriber, and pharmacist awareness of and use of these low-cost generics, are there other policies the Innovation Center should consider to encourage broad and balanced (i.e., MA-PD and PDP) Part D sponsor participation in the M2DL Model?
- CMS Outreach Efforts: To achieve a widespread level of awareness among relevant stakeholders, what outreach activities should CMS conduct to be most effective to reach prescribers, beneficiaries and their caregivers, and pharmacists, respectively?
- Part D Sponsor Outreach and Education Efforts for Beneficiaries: Are there best practices used by Part D sponsors’ communications and marketing efforts to prescribers, beneficiaries, and their caregivers about the details of a given Part D plan? Please provide examples of specific marketing elements or techniques that have either been effective or ineffective at helping beneficiaries (including low-income populations and underserved populations), and their prescribers navigate their Part D plan options. Additionally, how can Part D sponsors utilize the real-time benefit tools to educate prescribers and beneficiaries about the $2 Drug List?
- Assessment of Model Impact: What outcomes and metrics will be most important for the Innovation Center to monitor and evaluate for this model? Beyond CMS’s existing administrative data, what data sources might help to evaluate the impact of this model? Given the sample drug list as proposed and timeframe of the model test, what health-related outcomes should the evaluation consider measuring?
- Drug List Modifications: How could future changes to the $2 Drug List be best communicated to beneficiaries, prescribers, pharmacies, and plans?
Takeaways
By identifying generic covered Part D drugs that would target common conditions in the M2DL Model, the Innovation Center states that it is working to advance the affordability of generic drugs and to address uncertainty beneficiaries face in assessing out-of-pocket costs prior to filling a prescription, which may lead to increased medication adherence and other measurable health outcomes. To promote the $2 Drug List, the Innovation Center plans to conduct outreach efforts to raise awareness among beneficiaries, healthcare providers, and industry professionals. Additionally, through ongoing evaluation, CMS will monitor the model’s impact on drug utilization, provider satisfaction, and healthcare outcomes. Medicare Part D plan sponsors, drug manufacturers, pharmacists, and researchers should consider submitting comments in response to the RFI.
In the coming months, we expect that CMS will release additional information on the M2DL Model and continue to issue prescription drug pricing policy developments. For more information, or you would like assistance in preparing and submitting responses to the RFI, please contact the professionals listed below, or your regular Crowell Health Solutions contact.