CMS Unveils Sample $2 Generic Drug List for Medicare Part D Enrollees

— But experts are skeptical the list would have much impact

by Joyce Frieden, Washington Editor, �鶹��ý October 9, 2024

A photo of a calculator displaying MEDICARE PART D lying on a pile of US currency next to a spilled bottle of pill

The Centers for Medicare & Medicaid Services (CMS) on Wednesday issued a request for information on a proposed model program that would lower prices to $2 per month for certain generic drugs purchased through Medicare Part D drug plans, but experts expressed concerns about the potential uptake and usefulness of such a program.

The model is designed to provide individuals more certainty about the out-of-pocket costs for these generic Part D drugs for common conditions, such as high cholesterol and high blood pressure, CMS .

"We want generic drugs for common chronic conditions to be affordable for people on Medicare. Reliably low copayments for essential generic drugs make it more likely that seniors and people with disabilities can afford the drugs they need to stay healthy," HHS Secretary Xavier Becerra said in the release.

Becerra added that the administration has taken several other actions to lower drug costs for older adults, including capping the cost of insulin, making vaccines available without a copay, and negotiating lower drug costs for some expensive brand-name drugs. "We will continue to do everything we can to make healthcare more affordable and accessible for everyone," he said.

The generic drugs being considered for this model would not be subject to utilization management requirements (except for safety-related requirements) at any network pharmacies, according to the agency. Participation in the model would be voluntary for Part D sponsors and could start as early as January 2027.

In its request for information, CMS included a that are being considered for the program. In addition to drugs for high cholesterol and hypertension, the 271 medications on the list include several dosages and formulations of many other common drugs such as the opioid use disorder treatment buprenorphine, the thyroid medication levothyroxine, and the antidepressant fluoxetine.

"The initial version of the $2 Drug List represents a starting point for the drug list that would be included in the model," Liz Fowler, PhD, deputy administrator of CMS and director of the CMS Innovation Center, said in the release. "CMS intends to include many drugs that are used to treat common conditions for people with Medicare, with periodic updates to the drug list once it is finalized."

The list was developed with the help of an external technical expert panel that included physicians, pharmacists, and health policy experts, CMS said.

Industry experts were skeptical about the model's potential value. The list "has the possibility to lower out-of-pocket drug costs for some Medicare beneficiaries, but it is unlikely to have a broad impact," Margaret Scott, MPH, a principal at Avalere, a healthcare consulting firm based in Washington, wrote in an email to �鶹��ý. "The generic products on the list are generally low-cost to plans and have wide coverage at low copays."

In addition, "with plans working to implement so many changes to Part D in the next several years, it's unknown whether plans will be interested in a new program that will likely have limited benefit to their members," she noted. "Other policy proposals would likely have a larger benefit to beneficiaries. For example, an Avalere analysis of 2024 Part D formularies found that more than 40% of generic drugs are not on the lowest cost-sharing tier. If CMS required plans to include generic drugs on the lowest cost-sharing tier, it is likely to have a greater effect on out-of-pocket costs."

Marsha Simon, PhD, an independent drug industry analyst in Washington, told �鶹��ý that it was "rather meaningless" for the Biden-Harris administration, "in its final months, to announce a model that would not be operational until 2027 at the earliest."

"Further, I suspect that few Part D plans will choose to participate as it narrows their options in their negotiations with manufacturers, particularly for those generics that remain expensive for supply chain [reasons] or because a single manufacturer is the last to make the drug," she wrote. However, she added, "it has some merit from an affordability standpoint for those few expensive generics."

The deadline to respond to the request for information is December 9, at 11:59 p.m. PST; comments can be , CMS said.

Joyce Frieden oversees �鶹��ý’s Washington coverage, including stories about Congress, the White House, the Supreme Court, healthcare trade associations, and federal agencies. She has 35 years of experience covering health policy.