The Biden administration proposes to rescind a Trump-era model that ties Medicare Part B drugs and biologics to the lower price drug manufacturers receive in other wealthy countries.
Known as the Most favored nation model, the initiative equates payments for Medicare Part B drugs with the lowest price paid by any Organization for Economic Cooperation and Development country that has a per capita gross domestic product that is at least 60% of the US GDP per capita The goal of the model, which focuses on a pool of about 50 drugs that account for a high percentage of Medicare spending, is to curb rising drug prices.
In the proposed rule from the Centers for Medicare and Medicaid Services issued Friday, the agency announced its plans to rescind the model. CMS noted that it had received approximately 1,166 pieces of correspondence related to the model. Almost all commenters agreed that the high costs of prescription drugs needed to be addressed, but most also raised concerns about the start of the model during the Covid-19 pandemic.
“If finalized, our proposal would allow us to take time to further consider the issues identified by commenters and address the procedural deficiencies in the November 2020 interim final rule by rescinating it,” stated CMS.
The Most Favored Nation Model became effective through a provisional final rule published on November 27, 2020. It was scheduled to run from January 1 of this year to December 1, 2020. December 31, 2027. But the rule, and therefore the model, was never implemented.
In December 2020, four lawsuits related to the provisional final rule and model were filed. A federal judge issued a nationwide preliminary injunction in one of the lawsuits, preventing the rule from taking effect on January 1 as scheduled.
Suppliers have also made clear their opposition to the rule. Last November, Medical Group Management Association Senior Vice President for Government Affairs Anders Gilberg said that the model will cut Payments to medical offices that treat some of the most vulnerable patients in the country. Later, the American Hospital Association urged CMS withdraw immediately the final interim rule and “replace it with a serious effort at drug price reform.”
In addition, the providers claimed that the agency did not follow proper procedures when promulgating the model.
Vendors announced CMS’s proposal to reject the model.
“We have long opposed mandatory and untested models,” MGMA’s Gilberg said in an email. “When this model was first announced last year, we were perplexed to see that the onus was on the practices of medical groups and not pharmaceutical companies to finally solve the problem of high drug prices in this country. . If this model were to take effect, it would have threatened access to care for some of the most vulnerable patients in the country. “
CMS is now exploring new opportunities to address the high cost of Medicare Part B drugs, manufacturers’ prices, and the resulting growth in Medicare drug spending.
“We will continue to carefully consider the feedback we receive on the November 2020 interim final rule as we explore all options to add value to Medicare Part B drug payments and improve beneficiaries’ access to care based on the evidence, “the agency said in its latest proposed rule.
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