Guarding U.S. Medicare Against Rising Drug Costs (GUARD) Model

DEPARTMENT OF HEALTH AND HUMAN SERVICES <SUBAGY>Centers for Medicare & Medicaid Services</SUBAGY> <CFR>42 CFR Part 514</CFR> <DEPDOC>[CMS-5546-P]</DEPDOC> <RIN>RIN 0938-AV74</RIN> <SUBJECT>Guarding U.S. Medicare Against Rising Drug Costs (GUARD) Model</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Centers for Medicare & Medicaid Services (CMS), Department of Health and Human Services (HHS). <HD SOURCE="HED">ACTION:</HD> Proposed rule. <SUM> <HD SOURCE="HED">SUMMARY:</HD> This proposed rule would implement the Guarding U.S. Medicare Against Rising Drug Costs (GUARD) Model to test a new Medicare payment model under section 1115A of the Social Security Act. The model proposes a test of an alternative payment method for calculating inflation rebates for certain Part D drugs and biological products. The proposed GUARD Model would test whether changing the calculation of the Part D inflation rebate would reduce costs for the Medicare program while preserving or enhancing quality of care for Part D enrollees. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> To be assured consideration, comments must be received at one of the addresses provided below, by February 23, 2026. </EFFDATE> <HD SOURCE="HED">ADDRESSES:</HD> In commenting, please refer to file code CMS-5546-P. Comments, including mass comment submissions, must be submitted in one of the following three ways (please choose only one of the ways listed): 1. <E T="03">Electronically.</E> You may submit electronic comments on this regulation to <E T="03">http://www.regulations.gov.</E> Follow the “Submit a comment” instructions. 2. <E T="03">By regular mail.</E> You may mail written comments to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-5546-P, P.O. Box 8013, Baltimore, MD 21244-8013. Please allow sufficient time for mailed comments to be received before the close of the comment period. 3. <E T="03">By express or overnight mail.</E> You may send written comments to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-5546-P, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850. For information on viewing public comments, see the beginning of the <E T="02">SUPPLEMENTARY INFORMATION</E> Section. <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> Vinod Mitta, 667-290-8712 or <E T="03">GUARDmodel@cms.hhs.gov.</E> </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <E T="03">Information Included with Pic Comments:</E> We encourage commenters to include supporting facts, research, and evidence in their comments. When doing so, commenters are encouraged to provide citations to the published materials referenced, including active hyperlinks. Likewise, commenters who reference materials which have not been published are encouraged to upload relevant data collection instruments, data sets, and detailed findings as a part of their comment. Providing such citations and documentation will assist us in analyzing the comments. <E T="03">Inspection of Public Comments:</E> All comments received before the close of the comment period are available for viewing by the public, including any personally identifiable or confidential business information that is included in a comment. We post all comments received before the close of the comment period on the following website as soon as possible after they have been received: <E T="03">http://www.regulations.gov.</E> Follow the search instructions on that website to view public comments. The Centers for Medicare & Medicaid Services (CMS) will not post on <E T="03">Regulations.gov</E> public comments that make threats to individuals or institutions or suggest that the commenter will take actions to harm an individual. CMS continues to encourage individuals not to submit duplicative comments. We will post acceptable comments from multiple unique commenters even if the content is identical or nearly identical to other comments. <E T="03">Plain Language Summary:</E> In accordance with 5 U.S.C. 553(b)(4), a plain language summary of this rule may be found at <E T="03">https://www.regulations.gov/.</E> <HD SOURCE="HD1">I. Executive Summary </HD> <HD SOURCE="HD2">A. Background</HD> Challenges related to the affordability of prescription drugs adversely affect taxpayers by diverting funds that could be used to improve health; such challenges also pose a direct concern for patients, with 55 percent of adults reporting that they remain concerned about medication affordability. <E T="51">1 2</E> <FTREF/> High drug costs limit access to care and treatment, which in turn, can have cascading consequences that lead to poor health for patients, increased medical spending, and potentially avoidable expenditures for all payers, including Medicare. <SU>3</SU> <FTREF/> Results from recent surveys show that many Americans, including Medicare beneficiaries, face significant financial burden of care that has resulted in skipping or rationing medication due to cost. <SU>4</SU> <FTREF/> <FTNT> <SU>1</SU>  Sparks, G., et al. (2024). <E T="03">Public Opinion on Prescription Drugs and Their Prices.</E> KFF. <E T="03">https://www.kff.org/health-costs/public-opinion-on-prescription-drugs-and-their-prices/</E> (Accessed: 10 December 2025). <SU>2</SU>  Jones, E. & Noda, A. (2025). <E T="03">Drug Costs and Their Impact on Care: Insights from Medicare Patients and Providers.</E> The Commonwealth Fund. <E T="03">https://www.commonwealthfund.org/publications/issue-briefs/2025/feb/drug-costs-impact-care-insights-medicare-patients-providers</E> (Accessed: 10 December 2025). </FTNT> <FTNT> <SU>3</SU>  Nekui, F., et al. (2021). Cost-related Medication Nonadherence and Its Risk Factors Among Medicare Beneficiaries. <E T="03">Medical Care, 59</E> (1):13-21. <E T="03">https://doi.org/10.1097/MLR.0000000000001458</E> . </FTNT> <FTNT> <SU>4</SU>  Arnold Ventures, Commonwealth Fund, & PerryUndem. (2025). <E T="03">Drug Costs and Their Impact on Care. https://www.arnoldventures.org/stories/drug-costs-and-their-impact-on-care</E> (Accessed: 10 December 2025). </FTNT> Financial toxicity, or the negative impact that the monetary burden of medical care can have on patients' well-being, fiscal security, and overall health, <SU>5</SU> <FTREF/> can be pronounced among the elderly population, most of whom are covered by Medicare, and among patients where the cost of treatment is high. <SU>6</SU> <FTREF/> One in four adults taking prescription drugs report difficulty affording their medication, including 40 percent of those with household income of less than $40,000 per year. <SU>7</SU> <FTREF/> A separate survey conducted concluded that about four in 10 older adults with Medicare reported problems accessing health care because of its costs, and that 14 percent of Medicare beneficiaries said they skipped taking or sometimes did not fill their prescription because of the expense; this can have serious health-related consequences for Medicare beneficiaries and may result in potentially avoidable costs for Medicare. <SU>8</SU> <FTREF/> <FTNT> <SU>5</SU>  Arastu A., et al. (2020). Assessment of Financial Toxicity Among Older Adults with Advanced Cancer. <E T="03">JAMA Network Open, 3</E> (12):e2025810. <E T="03">https://doi.org/10.1001/jamanetworkopen.2020.25810</E> . </FTNT> <FTNT> <SU>6</SU>  Narang, A.K. & Nicholas, L.H. (2016). Out-of-Pocket Spending and Financial Burden Among Medicare Beneficiaries with Cancer. <E T="03">JAMA Oncology, 3</E> (6), 757. <E T="03">https://doi.org/10.1001/jamaoncol.2016.4865.</E> </FTNT> <FTNT> <SU>7</SU>  Sparks, G., et al. (2024). <E T="03">Public Opinion on Prescription Drugs and Their Prices.</E> KFF. <E T="03">https://www.kff.org/health-costs/public-opinion-on-prescription-drugs-and-their-prices/</E> (Accessed: 10 December 2025). </FTNT> <FTNT> <SU>8</SU>  Leonard, F., et al. (2023). <E T="03">Medicare's Affordability Problem: A Look at the Cost Burdens Faced by Older Enrollees.</E> The Commonwealth Fund. <E T="03">https://www.commonwealthfund.org/publications/issue-briefs/2023/sep/medicare-affordability-problem-cost-burdens-biennial</E> (Accessed: 10 December 2025). </FTNT> Medicare Part D prescription drug costs have been rising over time, with total Part D gross drug spending increasing from $121 billion in 2014 to $276 billion in 2023, an increase of over 100 percent, as reported by the Medicare Payment Advisory Commission (MedPAC). <SU>9</SU> <FTREF/> This translates to an approximately 66 percent increase in average gross spending for each beneficiary who used Part D drugs over that same period ($3,267 in 2014 to $5,429 in 2023). <SU>10</SU> <FTREF/> The increase in Part D gross drug spending is consistent with overall trends in U.S. drug spending. A recent analysis shows that drug spending in the United States increased from $600 billion in 2018 to $858 billion in 2023 for all drugs (a 43 percent increase), regardless of payer source. <SU>11</SU> <FTREF/> Retail prescription drug prices are expected to continue to increase over time, driven by a number of factors, including increases in the use of prescription drugs as well as increases in drug prices over time. <SU>12</SU> <FTREF/> <FTNT> <SU>9</SU>  MedPAC. (2025). <E T="03">Health Care Spending and the Medicare Program. https://www.medpac.gov/wp-content/uploads/2025/07/July2025_MedPAC_DataBook_SEC.pdf</E> (Accessed: 10 December 2025). </FTNT> <FTNT> <SU>10</SU>  MedPAC. (2025). <E T="03">Health Care Spending and the Medicare Program. https://www.medpac.gov/wp-content/uploads/2025/07/July2025_MedPAC_DataBook_SEC.pdf</E> (A ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 617k characters. 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