Biden Administration Unveils Plan To Provide Generic Drugs for $2 to Medicare Recipients

The U.S. Department of Health and Human Services (HHS), through the Centers for Medicare & Medicaid Services (CMS), has released a Request for Information (RFI) regarding a new initiative to lower prescription drug costs for Medicare recipients.

The Medicare $2 Drug List Model, developed under President Biden’s Executive Order 14087, seeks to offer certain generic drugs for a fixed copayment of no more than $2 per month.

This initiative targets commonly prescribed drugs for conditions like high cholesterol and high blood pressure.

Also Read: Novo Nordisk’s Ozempic Might Be Among 2027 Medicare Price Negotiation Targets.

The Center for Medicare and Medicaid Innovation (Innovation Center) has designed the Medicare $2 Drug List Model to test whether simplifying access to affordable, clinically important generics will improve health outcomes, improve medication adherence, and boost overall satisfaction with the Medicare Part D program.

These drugs, which would not be subject to typical utilization management requirements, could be available at all participating pharmacies as early as January 2027.

The initial list of drugs for the $2 Drug List Model has been carefully developed through a rigorous process. It incorporates input from physicians, pharmacists, and health policy experts to ensure that the selected medications address common conditions for Medicare recipients.

The concept of a fixed-cost drug list is not new, with many retail pharmacies already offering generic medications at low, standardized prices.

However, the Medicare $2 Drug List Model will be tailored specifically to Medicare recipients.

Last week, the HHS released final guidance for the second  Medicare Drug Price Negotiation Program cycle.

This initiative aims to provide lower drug prices starting in 2026 and 2027.

The first round of negotiations focused on ten specific drugs. When the new prices take effect in 2026, Medicare recipients should save approximately $1.5 billion in out-of-pocket costs.

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