Most Favored Nation Drug Pricing Rule Temporarily Blocked

Thoughtware Alert Published: Dec 29, 2020

On December 23, 2020, the Most Favored Nation drug pricing rule slated to be effective January 1, 2021, was temporarily blocked by a judge on the grounds that it violated the public comment period. This rule, originally proposed in October 2018, targets CMS Part B payments on 50 of the highest-cost drugs and biologics with plans to decrement payments over seven years according to an international index of prices. In its rule, CMS released calculations and comparative countries for which the 50 drug prices were related.

A majority of the criticism for the rule is directed at the insensitivity of the rule’s timing, amid a third wave of COVID-19, and a disagreement in methodology—hospital, oncology, and specialty groups are concerned that lowering the Medicare Part B drug payments to providers overlooks the need for manufacturers to take accountability and lower their prices. Ultimately, however, the court’s decision for a temporary restraining order on the rule was attributed to a PhRMA lawsuit.

The outlook of this rule is not certain. The rule could be struck down for other legal and procedural reasons or with the changing administration.

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