HHS Proposes GUARD Model to Curb Medicare Drug Cost Increases
Published Date: 12/23/2025
Proposed Rule
Summary
The GUARD Model aims to help Medicare save money by changing how drug price increases are handled for certain medicines in Part D. This new plan could lower costs while keeping or improving care for people on Medicare. Comments on this idea are open until February 23, 2026, so now’s the time to weigh in!
Analyzed Economic Effects
5 provisions identified: 3 benefits, 0 costs, 2 mixed.
New Part D Rebate Test for Medicare
CMS proposes the GUARD Model to test a new way to calculate Part D inflation rebates for certain drugs starting January 1, 2027. The test aims to see whether this alternative rebate method would reduce Medicare and taxpayer spending while preserving or enhancing quality of care for people on Medicare.
Which Drugs Are In or Out
The GUARD Model would include sole‑source Part D drugs and sole‑source biological products in specific therapeutic categories (for example, Analgesics; Anticonvulsants; Antidepressants; Antineoplastics; Antipsychotics; Antivirals; Cardiovascular Agents; Blood Glucose Regulators; Respiratory Tract/Pulmonary Agents; and others listed in the rule). The model would exclude generics and biosimilars, any sole‑source product with annual application‑level gross covered drug costs below the GUARD minimum spend threshold, and drugs subject to a negotiated maximum fair price during the price applicability period.
Manufacturers May Owe International‑Benchmark Rebates
Under GUARD, CMS would set an applicable international benchmark price for each included drug using selected reference countries and would compare that benchmark to the Medicare net price (WAC minus rebates and discounts). If the Medicare net price is greater than the applicable international benchmark, the manufacturer would be required to pay a GUARD Model rebate that is deposited into the Medicare Prescription Drug Account; CMS would waive the existing Part D inflation rebate calculation and timing provisions for amounts the GUARD rebate replaces.
International Price Benchmarking Method
CMS would use a set of reference countries (Australia; Austria; Belgium; Canada; Czech Republic; Denmark; France; Germany; Ireland; Israel; Italy; Japan; the Netherlands; Norway; South Korea; Spain; Sweden; Switzerland; and the United Kingdom) and two methods to set an international benchmark: Method I (default) is the lowest country‑level average price adjusted by GDP (PPP); Method II (updated) can use manufacturer‑submitted across‑country average net prices adjusted by GDP (PPP). The applicable benchmark would be the greater of the default and updated benchmarks when both are available.
CMS Will Track Effects on Benefits and Cost Sharing
CMS will evaluate the GUARD Model by examining Medicare net spending and additional outcomes, including whether Part D plan benefits change for GUARD drugs and whether beneficiary cost sharing for those drugs is affected. The evaluation is part of the test to see if program expenditures fall while quality of care is preserved or enhanced.
Your PRIA Score
Personalized for You
How does this regulation affect your finances?
Sign up for a PRIA Policy Scan to see your personalized alignment score for this federal register document and every other regulation we track. We analyze your financial profile against policy provisions to show you exactly what matters to your wallet.
Key Dates
Department and Agencies
Related Federal Register Documents
2026-04797 — Medicare and Medicaid Programs; CY 2026 Payment Policies Under the Physician Fee Schedule and Other Changes to Part B Payment and Coverage Policies; Medicare Shared Savings Program Requirements; and Medicare Prescription Drug Inflation Rebate Program; Correction
This document fixes some typos and technical mistakes in the Medicare and Medicaid payment rules for 2026. It affects doctors, healthcare providers, and anyone using Medicare Part B by clarifying payment policies and program requirements starting January 1, 2026. These corrections help make sure payments and coverage rules are clear and accurate, so everyone gets paid right and on time.
2026-04467 — Patient Protection and Affordable Care Act, HHS Notice of Benefit and Payment Parameters for 2027; and Basic Health Program; Correction
This correction fixes some missing labels in important tables from the 2027 health insurance rules under the Affordable Care Act. It mainly affects insurance companies and people using marketplace plans by clarifying how risk and payments are calculated. These fixes take effect right away on March 6, 2026, ensuring everyone has clear info before the 2027 plan year starts.
2025-23081 — Medicare Program; Inpatient Rehabilitation Facility Prospective Payment System for Federal Fiscal Year 2026 and Updates to the IRF Quality Reporting Program; Correction
This correction fixes some math and typo mistakes in the Medicare payment rules for inpatient rehab facilities starting October 1, 2025. It mainly affects rehab centers by updating their payment rates and quality reporting details to be fair and accurate. These changes ensure providers get the right money and info for the 2026 fiscal year.
2025-22543 — Medicare Program; Alternative Payment Model Updates and the Increasing Organ Transplant Access (IOTA) Model
Medicare is updating its payment plans to help more people get organ transplants through the Increasing Organ Transplant Access (IOTA) Model starting in Performance Year 2. These changes affect hospitals and doctors who work with Medicare patients needing transplants, aiming to improve care and save lives. Comments on the proposed rule are open until February 9, 2026, so stakeholders can share their thoughts before it’s finalized.
2025-21767 — Medicare and Medicaid Programs; Calendar Year 2026 Home Health Prospective Payment System (HH PPS) Rate Update; Requirements for the HH Quality Reporting Program and the HH Value-Based Purchasing Expanded Model; Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program Updates; DMEPOS Accreditation Requirements; Provider Enrollment; and Other Medicare and Medicaid Policies
Starting in 2026, Medicare is updating how it pays for home health care and durable medical equipment, making sure payments match patient needs better. Home health providers will see new rules for quality reporting and value-based programs, while suppliers must meet updated accreditation and enrollment standards. These changes affect patients, providers, and suppliers, with payment updates and new deadlines kicking in early next year.
2025-21458 — Medicare and Medicaid Programs; CY 2026 Payment Policies Under the Physician Fee Schedule and Other Changes to Part B Payment and Coverage Policies; Medicare Shared Savings Program Requirements; and Medicare Prescription Drug Inflation Rebate Program; Correction
This document fixes some technical mistakes in the Medicare payment rules for 2026, especially about payments for skin substitutes. It affects doctors, Medicare patients, and providers by clarifying how certain payments work starting November 28, 2025. No big changes in money, just important corrections to keep things running smoothly.
Previous / Next Documents
Previous: 2025-23704 — Debt Collection Authorities Under the Debt Collection Improvement Act of 1996
The Treasury is updating rules for the Treasury Offset Program, which helps collect government debts by taking money from payments owed to people who owe the government. These changes make the rules clearer, bring back some flexible options, and add new powers to improve debt collection. If you’re involved with government payments or debts, watch out—comments on these updates are open until February 23, 2026.
Next: 2025-23719 — Airworthiness Directives; Honda Aircraft Company LLC Airplanes
The FAA is updating safety rules for certain Honda HA-420 airplanes to fix a flap control part that could cause trouble by bumping into other parts. Owners will need to replace this part with a new, improved version to keep flying safe. Comments on this update are open until February 6, 2026, and the fix might cost some time and money but keeps everyone safer in the sky!
Take It Personal
Get Your Personalized Policy View
Start a Free Government Policy Watch to see how policy affects your household, then upgrade to PRIA Full Coverage for year-round monitoring.
Already have an account? Sign in