40 states join CMS Medicaid drug pricing model

 Forty states and Puerto Rico have signed agreements to join the Generous Model, a Medicaid drug payment initiative that ties prices for certain prescription drugs to what other developed nations pay, CMS announced Sept. 18. 

Four things to know:

1. All 50 states, the District of Columbia and Puerto Rico applied to participate. The remaining states have until Sept. 30 to sign on. The five-year model launched in January.

2. Under the model, participating manufacturers make covered outpatient drugs available to state Medicaid programs at most-favored-nation prices. States invoice manufacturers for supplemental rebates to reach international price benchmarks. CMS monitors pricing accuracy and shares in the rebates through a reduction in the federal share of Medicaid payments.

“Medicaid programs will get the best possible price for drugs, delivering better value for taxpayers and freeing up funds to give vulnerable Americans the high-quality care they deserve,” CMS Administrator Mehmet Oz, MD, said in a news release.

3. The model covers hundreds of drugs across major classes, including oncology, diabetes and asthma therapies, according to a White House fact sheet released the same day. 

4. CMS estimates the model will save $5.2 billion a year in taxpayer dollars but did not detail the methodology behind the figure. The fact sheet cited projections from the Council of Economic Advisers, which estimated $36.6 billion in federal savings and $27.6 billion in state savings over the next decade. 

https://www.beckershospitalreview.com/finance/40-states-join-cms-medicaid-drug-pricing-model-4-notes/