Sunday, August 8, 2021

Very Brief Blog: CMS Nixes "Most Favored Nation" Rule for Drug Pricing, But Still Seeking New Ideas for Drug Pricing

What happened:

The Trump administration made headlines when it released a proposal to re-set Medicare Part B drug prices to the level of European countries.  The Biden administration has nixed the idea, but promises to keep revisiting drug pricing.


The Trump administration made headlines in December 2020 when it suddenly released a go-live proposal ready to re-set Medicare Part B drug prices to the level of European countries.  Trump aimed to implement the rule as quickly as it could be carried out by policymakers. (My December blog here).  

The December final rule quickly collided with the courts, in part, because CMS asserted it needed to release the rule as final rulemaking (so-called "interim final" rulemaking) due to the "drug pricing crisis." 

That point aside, the Most Favored Nations escapade is conceptually interesting because it was an extreme application of the powers of the Center for Medicare Innovation (CMMI).  CMMI was created by the Affordable Care Act with the authority to waive any CMS law for the purpose of a demonstration model, that model being potentially of any length or scope.   

Uses of CMMI to waive Medicaid rules are widely used and are routinely classed as "Section 1115A" waivers, which means, CMMI demonstration projects allowing the waiver of any existing CMS law.

See the inspection copy of the Biden rule here.   The typeset Federal Register version will appear August 10.  

While the Trump rule was scheduled to go into effect, as if it were a final rule, it also triggered 1166 comments.  We propose to "address the November 2020 interim final rule's procedural deficiencies by rescinding it."  LOL.  But HHS will continue to "explore all options" for drug pricing and to encourage "value based payments."

Technically, it is a "proposal to rescind" to which public comment is taken now and for 60 days.  

Friday Night Special

I believe it was released Friday after market close, which is a typical way to "dump" announcements as far outside the news cycle as possible.

Te recission rule was dropped without any press release.

But See July Biden Executive Order

See also a July executive order that was reviewed as follows.   "The focus of the executive order’s directives for the healthcare industry are designed to address drug‑pricing concerns.....President Biden also commits his administration to lowering prescription drug prices through 'aggressive legislative reforms' such as allowing Medicare to negotiate drug prices, imposing inflation caps, and supporting a public health insurance option."

As stated in Endpoints August 9, "What President Biden ultimately intends to do to lower drug prices may become more clear in the near future as Biden in mid-July ordered HHS to 'issue a comprehensive plan within 45 days to combat high prescription drug prices and price gouging.' "

On August 12, Biden released a "Fact Sheet" of ways Congress could lower drug prices.

With rapid coverage at Endpoints, here.

Insight to MCIT Machinations

The flip-flops between Trump and Biden administrations, and the technical means and tactics for carrying them out by the Biden team, is interesting for anyone watching the MCIT rule (Medicare Coverage of Innovation Technologies), Like the MFN rule, the MCIT rule which was "finalized" by Trump, then "put on hold" by Biden. In the case of the MCIT rule, it's on hold until December 2021.

Other Coverage

  • At Endpoints here. Medcity here.
  • "Citizens Against Government Waste" (CAGW) notes that aspects of MFN drug pricing are in HR3 here.  
  • Pink Sheet, subscription, here.

Appearing a few weeks earlier than the rule rescission, see recent review articles on Medicare and drug pricing at Commonwealth Fund here and at Kaiser Family Foundation news here.