Recent Medicare attempts to lower drug prices (beyond IRA) – Healthcare Economist

Recently, the Inflation Reduction Act (IRA) has gained attention for its provision allowing CMS to negotiate drug prices, but CMMI has proposed multiple payment models to address pharmaceutical costs and reimbursement. In 2023, CMS introduced 3 models to reduce OOP costs for Medicare and Medicaid beneficiaries. Details of these initiatives are summarized in a paper by Liu et al. (2024).

CMMI also proposed 3 new models in response to President Biden’s executive order in February 2023 related to drug prices: Medicare High-Value Drug List, Cell and Gene Therapy Access, and Accelerating Clinical Evidence. These models aim to address drug costs and access for beneficiaries.

Prior to these latest models, CMMI had proposed 9 other drug pricing models, including programs related to Medicare Part B and Part D drugs. The impact of these programs has been mixed. The success of Medicare’s attempts to lower drug prices remains a topic of ongoing debate and evaluation.