The Centers for Medicare & Medicaid Services (CMS) recently announced new voluntary and mandatory models that aim to boost access to GLP-1s and lower drug prices for Medicare Part B and D beneficiaries. Here are what the models look like.
The BALANCE model
The voluntary Better Approaches to Lifestyle and Nutrition for Comprehensive hEalth (BALANCE) model will expand access to GLP-1 medications for weight management and metabolic health improvement.
The model will allow Medicare Part D plans and state Medicaid agencies to cover the medications for improved access while controlling costs.
CMS announced as part of the program, it will negotiate directly with pharmaceutical manufacturers of GLP-1 drugs for lower net prices and standardized coverage terms. The agency said it will focus on guaranteed net pricing and potential out-of-pocket limits for beneficiaries, standardized coverage criteria, and evidence-based lifestyle support offerings.
Participation is voluntary for manufacturers, states, and plans and CMS has issued a request for applications to manufacturers and notices of intent for state Medicaid agencies and Medicare Part D plans, which are due January 8. The model will launch in Medicaid by May 2026 and in Medicare Part D in January 2027.
The CMS Innovation Center will evaluate the model’s impact on costs, adherence, outcomes, and beneficiary experience to determine whether it improves health and generates savings.
CMS Innovation Center Director Abe Sutton said in the announcement that the model aims to “empower more Americans to live healthier lives by expanding access to GLP-1s that have shown to be a powerful tool against the development of diseases, such as diabetes, cardiovascular disease, and other metabolic conditions, which can negatively affect a person’s long-term health.”
Before it launches the new model, CMS will also implement a new Medicare GLP-1 payment demonstration starting in July, which will serve as a short-term bridge to the model. The demonstration will allow Medicare beneficiaries to access the medications at prices negotiated by the administration as soon as possible.
The agency said the demonstration will operate outside of the Medicare Part D benefit’s coverage and payment flow, which means that Part D plan sponsors will not carry risk for eligible GLP-1 products. Under the demonstration, Medicare Part D beneficiaries who meet the negotiated access criteria will pay $50 a month for the medications.
The GUARD model
Under the proposed mandatory Guarding U.S. Medicare Against Rising Drug Costs (GUARD) model, CMS will address the cost of drugs in Medicare Part D.
The payment model would evaluate a new rebate formula for Medicare Part D drugs, including outpatient prescription drugs typically dispensed at retail, mail order, home infusion, and long-term care pharmacies. CMS said the model would factor in existing Medicare Part D manufacturer rebates and discounts, and the agency would leverage its authority to test a change in the calculation of inflation rebates in Medicare Part D that accounts for how much certain drugs cost in economically similar countries.
CMS said the model will test a modified inflation rebate for GUARD Model drugs using international drug pricing information to identify a benchmark that reflects prices paid in a set of economically comparable countries, which CMS expects would reduce program costs for Medicare Part D while preserving or improving beneficiaries’ quality of care.
The agency said in an announcement that Americans pay on average three times what other developed countries pay for the same medications, and Medicare Part D drug spending in 2024 made up about 30 percent of drug spending in the U.S. The model is designed to “bring Americans the drugs they need at prices they can better afford,” Sutton said. “No American should be forced to choose between filling prescriptions and buying groceries or other essential items.”
According to the proposed rule published in the Federal Register on December 23, the GUARD model would begin January 1, 2027, and operate for five years with rebate invoicing and payment continuing until 2033. The model would encompass 25 percent of Part D enrollees and would only apply to beneficiaries that live in randomly selected geographic areas of the country.
Comments about the proposal are due by February 23.
The GLOBE model
The proposed seven-year mandatory Global Benchmark for Efficient Drug Pricing (GLOBE) model aims to lower drug prices for beneficiaries in Medicare Part B, which are typically administered by physicians in health care settings.
Like the GUARD model, CMS intends to use GLOBE to assess a payment model using international drug pricing information to identify a benchmark that reflects prices paid in a set of economically comparable countries. GLOBE will focus on Medicare Part B drugs. The model would apply to Medicare beneficiaries who reside in a defined geographic area, encompassing approximately 25 percent of Medicare beneficiaries in the United States.
The drugs in the model would exclude biosimilars and their reference biologicals once a biosimilar enters the market in the United States.
The seven-year test period will include five performance years beginning October 1 and seven payment years beginning October 1.
According to the proposed rule published December 23 in the Federal Register, CMS estimates the model would result in savings of $11.9 billion in Medicare Part B net spending over seven years, including $8.4 billion in Medicare Part B fee-for-service, $7.5 billion in Medicare Advantage savings, and $4 billion in premium offset impacts.
CMS said in a statement that the HHS Office of the Assistant Secretary for Planning and Evaluation estimates that drug spending in Medicare Part B was nearly four times higher than drug spending across all payers (Medicare, Medicaid, and commercial) between 2008 and 2021. The proposed model, Sutton said, would help make life-saving cancer treatments and cutting-edge autoimmune medications, available at prices Americans can better afford.
Comments about the proposal are due by February 23.