Known as GUARD (Guarding US Medicare Against Rising Drug Costs), the model is envisioned as a demonstration project operated by the CMS Centers for Medicare and Medicaid Services’ (CMS) Innovation arm for Part D drugs. It is designed to reduce federal government spending by $14.1billion, but unfortunately it could simultaneously increase beneficiary costs by $3.6 billion.
The GUARD Model would include drugs in the six Part D protected classes, which includes oncology drugs.
A drug and its manufacturer would be required to participate and provide the government with rebates if:
- The Medicare program spends at least $69 million annually on the drug;
- The price in the U.S. exceeds an international benchmark based on prices in economically comparable countries;
- The drug is not already part of IRA direct price negotiations
CMS acknowledges that manufacturers required to pay a rebate to the federal government under this model are likely to simply increase prices to offset the new required rebates. This in turn will result in higher cost sharing for patients. The model simply shifts costs from the government to patients.
IRA price reforms are already expected to destabilize and disrupt access to treatments this year. And Part D premiums are already projected to increase in 2030, this is not welcome news.
Since a model is expected to ‘test’ a change in policy, CMS proposes to require these rebates in specific, randomly selected geographic areas representing approximately 25% of all Part D beneficiaries. This would mean some beneficiaries would see increased costs while others in the country would not. The model would run for five years, from 2027 to 2033.
Additionally, since IRA negotiated drugs are excluded from the model, ibrutinib (Imbruvica) and acalabrutinib (Calquence) are exempt. However drugs like zanubrutinib (Brukinsa) would be subject to these new rebates.
The ultimate fate of the models in their current form is unclear. Public comments are due on February 23, and the models will likely face legal challenges.
Key concerns raised by stakeholders include:
- Potential access disruptions
- Geographic inequities, with beneficiaries in GUARD regions subject to different pricing dynamics than those elsewhere
- Compounding effects alongside IRA inflation penalties and Medicare negotiation, particularly for higher-cost treatments
- Downstream impact on non-Medicare patients
