TAPP Submits Comments Urging Centers for Medicare & Medicaid Services to Withdraw Proposed GUARD Model

The Trade Alliance to Promote Prosperity has submitted comments requesting that the Centers for Medicare & Medicaid Services (CMS) withdraw the proposed GUARD Model prescription drug payment scheme.

In the comments, TAPP wrote the following:

I am writing on behalf of the Trade Alliance to Promote Prosperity to urge the Centers for Medicare & Medicaid Services (CMS) to withdraw the proposed GUARD Model for Medicare Part D. As drafted, GUARD would not improve patient access or affordability, exceeds the statutory intent of the Center for Medicare and Medicaid Innovation (CMMI), and risks undermining the United States’ global leadership in biopharmaceutical innovation.

Most importantly, none of the proposed Most Favored Nation (MFN) policies would meaningfully help patients access or afford their medicines. CMS itself states that it does “not expect the GUARD rebates to be visible to beneficiaries at the point of sale.” Yet the proposed rule estimates $3.6 billion in increased beneficiary costs. A policy that raises projected patient costs while shifting financial liability behind the scenes cannot reasonably be described as improving affordability.

The GUARD Model mandates manufacturer participation for all manufacturers of included drugs that receive a Part D inflation rebate report during an applicable period overlapping with the GUARD performance period. This is not a voluntary or limited demonstration. It applies broadly to single-source drugs and biologics across 17 therapeutic categories, excluding only those with gross Part D spending below $69 million in the first performance year (adjusted annually) and selected drugs for which a maximum fair price (MFP) is in effect.

Additionally, CMS proposes to randomly select 25 percent of certain zip code–related geographic areas for inclusion. This expansive, compulsory structure resembles nationwide price regulation rather than a targeted, time-limited CMMI test. Section 1115A of the Social Security Act was designed to test innovative payment and service delivery models—not to impose sweeping international reference pricing regimes across major segments of Medicare Part D.

At its core, GUARD would import foreign price controls into the United States. The model references 19 non-U.S. OECD countries—including Australia, Canada, France, Germany, Japan, South Korea, and the United Kingdom—using purchasing power parity–adjusted GDP criteria. Under Method I, CMS would benchmark to the lowest price among these countries using existing data sources. Under Method II, manufacturers could submit net pricing data, allowing CMS to calculate a volume-weighted average of foreign prices.

These foreign prices are not market-based signals; they are the product of centralized government negotiation, strict health technology assessments, and access limitations. Importing these flawed pricing structures risks importing their tradeoffs—namely restricted formularies, delayed launches, and limited access to innovative therapies. That approach does not strengthen the U.S. system; it weakens it.

The rebate structure further compounds uncertainty. The GUARD rebate equals the Medicare net price—calculated by subtracting manufacturer rebates and discounts from the wholesale acquisition cost—minus the applicable GUARD benchmark. Manufacturers must pay the greater of the GUARD rebate or the statutory inflation rebate. Even with certain exclusions, such as 340B units, the model introduces overlapping rebate obligations that create instability and distort investment incentives in critical therapeutic categories.

CMS acknowledges potential interactions with other Innovation Center models but provides no explicit exclusions between GUARD and GLOBE. The possibility of overlapping MFN-style payment reductions across Part B and Part D introduces significant operational and financial complexity, increasing the risk of unintended consequences throughout the Medicare program.

Beyond immediate market disruption, MFN policies carry serious long-term strategic implications. The United States has been the global leader in biopharmaceutical research and development because its market structure rewards high-risk innovation. Tethering U.S. pricing to foreign government-controlled benchmarks diminishes that incentive structure. Policies that erode America’s innovation ecosystem ultimately harm patients, workers, and national economic competitiveness.

Finally, the duration and scope of GUARD—a seven-year test period with five performance years beginning January 1, 2027, followed by two additional years for reconciliation—underscore that this is not a modest pilot. It is a fundamental restructuring of Medicare Part D payment policy.

For these reasons, we urge CMS to withdraw the GUARD proposal and instead focus on reforms that directly reduce patient out-of-pocket costs at the pharmacy counter, improve supply chain transparency, and preserve the United States’ leadership in medical innovation.

TAPP encourages like-minded individuals and organizations also to submit comments here.