Medicare mulls limiting per month costs for generic drugs at $2
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The U.S. Health Secretary gave the go-ahead to test a payment model designed to cap the out-of-pocket expenses for certain generic medications at a maximum of $2 per month per drug, the Centers for Medicare & Medicaid Services (CMS) announced.
"HHS is using every tool available to us to lower health care costs and increase access to high-quality, affordable health care," HHS Secretary Xavier Becerra said.
The proposal is in response to an executive order President Joe Biden signed in October 2022 directing Becerra to consider testing new healthcare payment and delivery models to lower prescription drug costs for Medicare and Medicaid recipients.
The first model "The Medicare $2 Drug List" targets generic drugs covered under the Medicare Part D plans for chronic conditions.
"Patients picking plans that participate in the Model will have more certainty that their out-of-pocket costs for these generic drugs will be capped at a maximum of $2 per month per drug," CMS said in a statement.
Becerra has also picked two other models for testing at the CMS Innovation Center. One model is designed to encourage timely confirmatory trial completion for drugs cleared under the FDA's accelerated approval pathway.
As part of this model, the CMS and FDA would work together to develop a payment model for drugs with accelerated approval, to cut Medicare spending on drugs with no confirmed clinical benefit.
Under the third model, CMS will administer multi-state agreements with manufacturers to help Medicaid beneficiaries gain access to certain cell and gene therapies, where costs can exceed $1M.
Major pharma companies: Pfizer (PFE), Merck (MRK), Bristol-Myers Squibb (BMY), Eli Lilly (LLY), AstraZeneca (AZN), GSK (GSK), Sanofi (SNY) (OTCPK:SNYNF), Novo Nordisk (NVS), Sanofi (SNY) (OTCPK:SNYNF), Abbott (ABT), AbbVie (ABBV), Gilead (GILD), Johnson & Johnson (JNJ), Biogen (BIIB), Amgen (AMGN) and Moderna (MRNA)
Generic drugmakers: Teva Pharmaceutical (NYSE:TEVA), Viatris (NASDAQ:VTRS), Amphastar (NASDAQ:AMPH), Amneal Pharmaceuticals (NYSE:AMRX), Lannett Company (LCI)
Cell and gene therapy developers: BioMarin Pharmaceutical (BMRN), Sarepta Therapeutics (SRPT), CRISPR Therapeutics (CRSP), bluebird bio (BLUE), Allogene Therapeutics (ALLO), Cellectis (CLLS).
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