The BALANCE Model and a New Wave of CMS Drug Pricing Models

On December 23, 2025, the Centers for Medicare & Medicaid Services (CMS) announced the Better Approaches to Lifestyles and Nutrition for Comprehensive hEalth (BALANCE) Model, a voluntary, alternative payment model (APM), designed to expand access to GLP-1 medications.  At its core, the BALANCE Model intends to promote the use of both GLP-1 medications and lifestyle interventions to help prevent chronic conditions and combat obesity, while also managing the costs of such medications for Medicare and Medicaid beneficiaries and taxpayers. 

Framework of the BALANCE Model

Similar to the recent Most Favored Nation (MFN) drug pricing deals with Novo Nordisk and Eli Lilly, which expanded GLP-1 coverage for Medicare beneficiaries at a discounted monthly rate, the BALANCE Model builds on the Trump administration’s broader strategy to lower drug costs through direct manufacturer negotiations. However, the BALANCE Model takes the MFN pricing approach a step further by also expanding the use of lifestyle-focused preventative care initiatives. 

In its December 23 announcement, CMS invited interested manufacturers to apply to opt into the BALANCE Model by responding to the Request for Applications (RFA) by January 8, 2026.  States and Part D plan sponsors were also asked to submit a Notice of Intent to participate by the same date. Under the BALANCE Model, CMS will negotiate directly with GLP-1 manufacturers to reduce net prices, cap out-of-pocket costs, and standardize coverage criteria.  CMS is also seeking commitments for manufacturer-provided lifestyle support services, such as fitness coaching and nutrition counseling, to supplement GLP-1 treatments and maintain long-term health.

The BALANCE Model will waive the current Part D coverage exclusion for weight-loss medications, meaning GLP-1s will be included in the basic benefit with set cost-sharing limits, aiming to increase accessibility and affordability. Participating plans will cover the negotiated drugs from participating manufacturers, and the manufacturers will provide rebates to keep prices aligned with negotiated terms. This structure integrates coverage, pricing, and access, targeting preventive care goals.

The BALANCE Model will also be open to all states participating in the Medicaid Drug Rebate Program (MDRP). States that wish to participate were also asked to respond to the State RFA by January 8, 2026. Under State Medicaid coverage, price reductions will occur through supplemental rebate agreements between state agencies and manufacturers. 

Action Plan and Timeline

The Model is set to launch in Medicaid programs as early as May 2026, and in Medicare Part D plans in January 2027. In the interim, CMS plans to implement a Medicare GLP-1 payment demonstration in July 2026. This demonstration will allow beneficiaries to obtain access to GLP-1 medications for $50 per month, so long as they meet the negotiated access criteria. 

Beyond BALANCE: Two Other CMS Proposed Models for Part B and Part D Drugs

In addition to the BALANCE Model, CMS has introduced several other pricing initiatives that align with the Trump administration’s MFN drug pricing strategies, also aimed at lowering the cost of prescription drugs. We discuss these proposed models in our recently published blog post, CMS Targets Rising Drug Costs with New GUARD and GLOBE Pilot Programs. 

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