CMS Scraps Most Favored Nation Drug Reimbursement Model

The Centers for Medicare & Medicaid Services (CMS) has released a proposed rule (the Proposed Rule) which, if finalized and adopted, would rescind the Trump Administration’s attempt to align reimbursement under Medicare Part B for certain drugs with benchmark pricing obtained from surveys of other countries – referred to as the Most Favored Nation Model (the Model).

A link to the proposed rule is here. Arent Fox previously analyzed the Model here. Comments to the Proposed Rule are due no later than October 12, 2021.

As predicted in our prior analysis, the Model faced numerous legal challenges, resulting in the issuance of a nationwide preliminary injunction that precluded the implementation of the Model on January 1, 2021. In addition, CMS indicated that they received over 1,000 comments in response to the November 2020 interim final rule adopting the Model.

In explaining its decision to propose the elimination of the Model, CMS stated in the Proposed Rule: “Given that the nationwide preliminary injunction precluded implementation of the MFN Model on January 1, 2021, as contemplated, that multiple courts found procedural issues with the November 2020 interim final rule, and that stakeholders expressed concern about the model start date,10 we are proposing to rescind regulations added by the November 2020 interim final rule and remove the associated regulatory text at 42 CFR part 513.”

Stakeholders should take the opportunity to comment on this proposal, as well as other recent Biden Administration proposals to address drug costs impacting the Medicare program. Arent Fox routinely drafts comments for our clients and reviews policy positions impacted by agency rules and guidance.