CMS officially rescinded the “Most Favored Nation (MFN)” interim final rule. The MFN rule was issued near the end of the Trump administration and was designed to link reimbursements for certain physician-administered drugs to prices in certain other higher-income countries. The rule would have created an alternative add-on payment for drugs paid under the model, specifically setting a single payment based on the entire cohort of MFN drugs. Providers were concerned about this rule due to its impact on reimbursements, causing pushback from both physicians and drug makers on the MFN final rule.
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The interim final rule was never implemented. A federal judge had halted the rule following multiple lawsuits from drug manufacturers and other stakeholders, citing concerns about the process CMS used to finalize the rule. The official rescission has been a long-awaited announcement among industry leaders.
As reported by Fierce Healthcare, some providers were worried the model would have made it impossible to stock up on certain drugs since prices would fluctuate from quarter to quarter. Providers such as oncology practices were worried they could buy the drug at one price but then be reimbursed at a lower price when it is administered later on. Some that commented on the proposed rule back in August were also concerned that manufacturers would not pay the discounted amount and patients could lose access to the products, according to the final rule.
The Biden administration will continue to explore other avenues to lower drug prices outlined in a recent report from HHS. As further indicated in the proposal to rescind the rule, the agency is exploring opportunities to promote value-based care and to address the cost of Medicare Part B drugs. CMS also indicated that the agency is exploring ways to modernize the Medicare program to improve the quality and cost of care for beneficiaries.