Biden-Harris Administration Unveils Three Models to Tackle High Prescription Drug Costs

On October 14, 2022, President Biden issued an executive order directing the U.S. Department of Health & Human Services (HHS) to consider additional actions to drive down prescription drug costs.[0] HHS Secretary Xavier Becerra recently announced that three models have been selected for testing by the Centers for Medicare & Medicaid Services' (CMS) Innovation Center to help lower the high cost of medicines in the USA.[1]

The first model, the Inflation Reduction Act of 2022, requires drug companies to pay Medicare a rebate if they raise their prices for certain Medicare Part B drugs faster than the rate of inflation.[2] This will begin April 1, 2021 and will result in lower coinsurance for beneficiaries on some Part B drugs based on an inflation-adjusted payment amount.[3]

The second model, the Cell and Gene Therapy Access Model, addresses an emerging but often prohibitively expensive area of drug development and will help Medicaid beneficiaries gain access to potentially life-changing, high-cost specialty drugs for illnesses like sickle cell disease and cancer.[4] Under this model, state Medicaid agencies will assign CMS to coordinate and administer multi-state, outcomes-based agreements with drugmakers for certain cell and gene therapies.[4]

The third model, the Medicare High-Value Drug List Model, will encourage Medicare Part D prescription drug plans to offer a low, fixed co-payment across all cost-sharing phases of the Part D drug benefit for a standardized list of generic drugs that treat chronic conditions.[5] Patients under this model will have a maximum out-of-pocket cost of $2 per month per drug for generic drugs.

The Biden-Harris Administration is dedicated to tackling the high costs of prescription drugs and increasing access to novel therapies.[0] The three models announced by HHS Secretary Xavier Becerra are intended to promote accessibility to life-changing drug therapies, reduce Medicare spending on drugs that have no confirmed clinical benefit, and improve quality of care.

0. “HHS Secretary Responds to the President’s Executive Order on Drug Prices” EIN News, 14 Feb. 2023,

1. “CMMI releases three new models aimed at lower generic, novel drug costs” FierceHealthcare, 14 Feb. 2023,

2. “Medical Savings in Retirement: Medicare Goes After Drug Companies for Price Gouging Above Inflation” GOBankingRates, 13 Feb. 2023,

3. “CMS announces new Medicare Part B drug inflation rebates” Healio, 14 Feb. 2023,

4. “CMS Rolls Out 3 Medicare Drug Savings Models” HealthLeaders Media, 15 Feb. 2023,

5. “CMS testing 3 new ways to lower drug prices” HealthExec, 15 Feb. 2023,