In Highly Anticipated Report, CMMI Announces Three New Drug Pricing Model Concepts

Yesterday, the Secretary of the Department of Health and Human Services (HHS) released a report in response to President Biden’s Executive Order on Lower Prescription Drug Costs for America, which describes three models the Secretary has selected for testing by the Center for Medicare and Medicaid Innovation (CMMI) (fact sheet, FAQs).

The models would address drug pricing incentives in Medicare Part B, Medicare Part D, and in the Medicaid program and seeks to build upon the reforms included in the Inflation Reduction Act (IRA). CMMI also notes that it developed these models based on input from various stakeholders, including patient groups, trade associations representing drug manufacturers and payers, academic institutions, and provider groups, among others.

The chart below captures the main components of each of the new model concepts.

Model Medicare High-Value Drug List Model Cell & Gene Therapy Access Model Accelerating Clinical Evidence Model
Overview The model would test allowing Part D sponsors to offer a Medicare-defined standard set of approximately 150 high-value generic drugs with a maximum copayment of $2 per 30-day supply. The model would test a new approach for administering outcomes-based agreement to promote affordability of high-cost gene therapy drugs for Medicaid beneficiaries. The model would adjust Medicare Part B payment amounts for Accelerated Approval Program (AAP) drugs to give manufacturers an incentive to expedite and complete confirmatory trials clinical trials.
Drugs Implicated Part D generic drugs for common chronic conditions Gene and cell therapies in Medicaid Part B fee-for-service (FFS) accelerated approval drugs
Model Population Part D beneficiaries enrolled in Medicare Advantage Prescription Drug (MA-PD) plans or standalone prescription drug plans (PDPs). Medicaid beneficiaries Medicare FFS beneficiaries
Participation Participation is voluntary, but CMS will explore flexibilities to encourage participation Participation is voluntary from state Medicaid agencies and selected manufacturers. Participation is mandatory for applicable Medicare Part B fee-for-service providers.
Timing The Secretary directs CMMI to request input from stakeholders and announce model specifications in advance of a model start date, as soon as operationally feasible. The Secretary directs CMMI to begin model development this year and to consider announcing model specifications in 2024-2025. Ultimately, it envisions CMMI launching the model in 2026 with a single therapeutic indication (e.g., sickle cell disease) and expand from there if feasible.


The Secretary directs CMMI to begin consultation with FDA to explore the Accelerating Clinical Evidence Model in 2023, and if determined appropriate, continue development thereafter with a targeted launch as soon as feasible

Erin Slifer joined Wynne Health Group in May 2019, following a year-long internship with the firm’s policy team while pursuing