Is CMS’ Proposed $2 Drug List Model Another Hit to Pharmacies?

CMS sees an opportunity to increase beneficiary access to $2 copays for a standardized list of generics across participating plans. | Viewpoints

by Ann Johnson, Pharm.D. , and Danielle Wu, M.B.A.

Seeking to identify programs that will create wins for both members and plan sponsors, the Centers for Medicare & Medicaid Services (CMS) is proposing a Medicare $2 Drug List Model. This proposal is in line with the Biden administration’s 2022 “Executive Order on Lowering Prescription Drug Costs for Americans,” which notes that “On average, Americans pay two to three times as much as people in other countries for prescription drugs, and one in four Americans who take prescription drugs struggle to afford their medications.” The $2 Drug List Model proposal comes on the heels of previous Medicare initiatives, such as $35 insulin and no-cost vaccines.

The Center for Medicare and Medicaid Innovation, also known as the CMS Innovation Center (CMMI), notes that as of 2023, only 20% (8 million) of Medicare Part D beneficiaries were enrolled in plans that offered generic drugs for $2 (or less) for a month’s supply, and these drugs lacked consistency across Part D plan sponsors. Under the proposed model, all enrollees in participating Part D plans would have access to each drug on the $2 Drug List for a fixed copay of no more than $2 for a month’s supply.

The model intends to target generic drugs for common conditions, such as high cholesterol and hypertension. The goal is to include a sufficiently comprehensive list of covered Part D drugs so that Medicare enrollees with common conditions will be able to find a suitable treatment option available on the $2 Drug List. The hope with this program is that offering these drugs at a low cost can improve medication adherence and ultimately lead to better health outcomes.