Lowering The Costs Of Drugs For All Americans

CMS is dedicated to lowering the costs of prescription drugs for all Americans. Part of their strategy is to increase the competition of generic and biosimilar drugs. This increase in competition normally causes lowering of prices. Generic and biosimilar drugs normally price themselves much lower than brand name drugs to attract that spectrum of the market. If improvements are made to these drugs and more of them become available, the prices for brand and generic drugs should drop.


Generic Drugs

Many plans are using generic drugs more and more; however, there is still room for improvement. 


In the CMS’s efforts to reduce the cost of prescription drugs for all Americans. They have managed to add 32 new brand-generic drug combinations. 


  • Generally the inclusion rate in formularies for generics was nearly 70% 
  • Over 90% of the time when a drug formulary included a brand name drug, the generic drug was also included. The remainder that was not included was because the generic brand was only about 5%-10% cheaper than the brand name drug.


Promoting Competition

The CMS has taken steps to make the process of adding generics or biosimilar drugs on to Medicare Part D plans. CMS is trying to define a way for plans to utilize generic drugs more. They are considering the addition of three new measures that may be used to calculate a plans star rating:


  1. Generic Substitution Rate
  2. Generic Therapeutic-Alternative Opportunity Rate
  3. Biosimilar Utilization Rate


These three measurements will be used to determine a plan’s rate of using generics and biosimilars over brand name drugs. These measurements will possibly be considered when providing star ratings for plans.

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Written by: Benavest

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ACA | Medicare

July 16, 2021