CMS Officially Launches ‘Most Favored Nation’ Drug Remuneration Model


The Centers for Medicare and Medicaid Services have officially rejected a Trump-era policy that would have prevented Medicare from paying more for certain outpatient drugs than the lowest price paid by other wealthy countries, according to a final rule released last week .

All but one of the 34 commentators on the proposed rule supported rescinding the policy, according to CMS.

“We will continue to carefully consider the comments from this stakeholder and the comments from other stakeholders we have received as we explore all options for incorporating value into Medicare Part B drug payments, improving beneficiary access.” to evidence-based care and reduce drug spending for consumers. and across the health care system, ”said the final rule.

The Trump administration issued an interim final rule last November that would have implemented a policy known as the nationwide most-favored-nation model for seven years, starting January 1, 2021. A court Federal government blocked the policy from taking effect last December, and that’s been on hold since the Biden administration took office shortly thereafter. CMS offered to get rid of the rule in August, citing legal issues with the Trump-era model. The final rule of December 29 comes into effect on February 28.

Hospitals, suppliers and pharmaceutical companies also criticized the protest, saying it would hurt patients’ access to drugs and hurt their own financial prospects. Although the model was touted as a way to reduce drug prices, it did not specify whether drug makers should lower prices for healthcare providers, meaning providers could have offered drugs to the provider. financial loss.

Suppliers also disagreed with pressure from the Trump administration to make the model mandatory across the country. Most of the Center for Medicare and Medicaid Innovation demonstrations are voluntary, last only a few years, and include only a handful of participants.

CMS’s decision to discontinue the model has come as a relief to healthcare industry players.

“The revised reimbursement methodology for some Part B drugs would have penalized medical practices and some of the most vulnerable beneficiaries they treat. We support the search for viable solutions to reduce drug costs and expenses, but not at the expense of the country’s medical practices and their patients. “said Claire Ernst, director of government affairs for the Medical Group Management Association, in a statement after the rule was repealed.

Indeed, the Biden administration has launched other ideas to control the costs of prescription drugs. President Joe Biden’s executive order on increased competition ordered the Food and Drug Administration to work with states to import drugs from Canada and urged regulators to prevent drug companies from avoiding competition from manufacturers of drugs. generics.

Biden also asked the HHS to release a report on the drop in drug prices. The report, released in September, recommended incentivizing providers to administer biosimilars and said it could consider small-scale mandatory models to link prescription drugs and biosimilars to better patient outcomes and better outcomes for patients. other factors. But the HHS has not gone into details or next steps, relying mainly on Congress.

The agency could even go ahead with a new model noticeably similar to most-favored-nation policy. The Biden administration’s problem with politics appeared primarily to be due to legal considerations, wrote Rachel Sachs, a law professor at Washington University in St. Louis, in an email.

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