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Medicare Drug Pricing

The GUARD Model is a proposed rule from the Centers for Medicare and Medicaid Services that would use international reference pricing to lower Medicare drug costs. It is 92 pages of regulatory prose published in the Federal Register, and it could change what every Medicare beneficiary pays at the pharmacy. The document describes a pricing formula based on what other countries pay, implementation timelines, affected drug categories, and the comment process. Most of those comment periods expire with fewer than 100 public comments, even though the rule affects over 50 million people. One comment from an affected patient carries real weight in the administrative record. This is how you participate in federal rulemaking.

US FederalCMS GUARD Model: Guarding U.S. Medicare Against Rising Drug Costs

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CMS proposes GUARD model to lower Medicare drug costs using international pricing

What changed

CMS proposed a new mandatory model called GUARD (Guarding U.S. Medicare Against Rising Drug Costs) that would test alternative calculations for Medicare Part D inflation rebates by comparing U.S. drug prices to international benchmarks from 19 economically comparable countries. The model would apply to sole-source drugs in 17 therapeutic categories and require manufacturers to pay additional rebates when Medicare net prices exceed international benchmarks.

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Who is affected

Medicare Part D beneficiaries who use sole-source brand-name drugs and biologics in categories like cancer treatments, heart medications, diabetes drugs, and mental health medications. Drug manufacturers of these products would be required to participate and potentially pay additional rebates. Part D plan sponsors may adjust formularies and cost-sharing.

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What you can do

Public comment period open until February 23, 2026. Comments can be submitted electronically at regulations.gov (file code CMS-5546-P), by regular mail to CMS P.O. Box 8013 Baltimore MD 21244-8013, or express mail to 7500 Security Boulevard Baltimore MD 21244-1850. Contact Vinod Mitta at 667-290-8712 or GUARDmodel@cms.hhs.gov for information.

Where the money goes

The GUARD Model is projected to reduce Medicare spending by $14.1 billion over 2028-2033, which would be deposited into the Medicare Prescription Drug Account. Part D gross drug spending increased from $121 billion in 2014 to $276 billion in 2023. U.S. brand-name drug prices are approximately 422% of prices in comparable countries.

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Key deadlines

2026-02-23: Public comment period closes

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Context

This builds on Inflation Reduction Act reforms but addresses a broader set of drugs. Unlike the Medicare Drug Price Negotiation Program which covers only 10-15 selected high-cost drugs after years on market, GUARD would apply to all sole-source drugs meeting criteria immediately. The model runs 2027-2031 for rebate calculations, with payments collected through 2033.

“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.”

“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.”

“U.S. brand-name prescription drug prices exceed those found in other Organization for Economic Co-operation and Development (OECD) countries.”

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