President Joe Biden on Friday signed an executive order directing HHS Secretary Xavier Becerra to explore new health care payment and delivery models through the Center for Medicare and Medicaid Innovation (CMMI) that could lead to lower drug costs.

Details on the order

As part of the executive order, Becerra will have 90 days to submit a report outlining "new health care payment and delivery models that would lower drug costs and promote access to innovative drug therapies for beneficiaries enrolled in the Medicare and Medicaid programs, including models that may lead to lower cost-sharing for commonly used drugs and support value-based payment that promotes high-quality care."

Becerra's report will include his plan and timeline to test any potential models through CMMI.

"Too many Americans face challenges paying for prescription drugs," the order states. "On average, Americans pay two to three times as much as people in other countries for prescriptions drugs, and one in four Americans who take prescription drugs struggle to afford their medications. Nearly 3 in 10 American adults who take prescription drugs say that they have skipped doses, cut pills in half, or not filled prescriptions due to cost."

CMMI will provide the Biden administration with "a useful set of tools to help lower health care costs and improve quality of care," and it can help to lower prescription drug costs, according to the order.

Commentary

According to Stacie Dusetzina, an associate professor in the department of health policy at Vanderbilt University, the goal of the executive order is "to have the secretary define some areas of opportunity to increase access to drugs or lower prices for people on Medicare and Medicaid."

"Part of this will be, 'what could we do now or sooner?' Some of the provisions for the Inflation Reduction Act don't kick in for a couple of years," she added. "There have already been attacks on the Inflation Reduction Act, and some Republican members talking about repealing it, or going after certain parts of the law."

However, a former official at CMMI told Bloomberg Law the executive order is "just lipstick."

"They will simply point to existing CMMI models that factor in drug costs as part of the overall design. A new model may be proposed along the way," the official said. "I think it's more policymakers trying to show how they are actively trying to use the tools available to them to effectuate affordability." (Gonzalez, Axios, 10/14; Twenter, Becker's Hospital Review, 10/14; King, Fierce Healthcare, 10/14; Lopez/Baumann, Bloomberg Law, 10/14)