Trump’s MFN Rule Roll-Out Stalled by California, Maryland Courts

Date: January 5, 2021 | Country: UNITED STATES | Region: NORTH AMERICA | Type: Policy | Keywords: #bio #executiveorder #hhs #lawsuit #medicare #mostfavorednations #phrma 
#referencepricing(irp)

PRICENTRIC BRIEF:

  • District court judges in Maryland and Northern California have ruled to stall the implementation of President Donald Trump’s “Most Favored Nations (MFN)” rule that was supposed to take effect on January 1, 2021
  • MFN stipulates that the U.S. will pay the lowest price for certain Medicare-covered drugs among the following wealthy, developed nations that are part of the Organization for Economic Co-operation and Development (OECD): Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Iceland, Ireland, Israel, Italy, Japan, Republic of Korea, Luxembourg, Netherlands, New Zealand, Norway, Spain, Sweden, Switzerland, and the United Kingdom
  • Maryland District Court Judge Blake and Northern California District Judge Chhabria granted a nationwide temporary restraining order and a nationwide preliminary junction, respectively, halting the implementation of the MFN rule for 14 days on the grounds that the Department of Health and Human Services (HHS) bypassed the legal process by failing to give proper notice of MFN and allow for comments

THE DETAILS

WASHINGTON, D.C., The United States – The year 2021 seems off to a good start for pharmaceutical companies in the United States, as district court judges in Maryland and Northern California have ruled to stall the implementation of President Donald Trump’s “Most Favored Nations (MFN)” rule that was supposed to take effect on January 1, 2021.

A radical policy change for the States, MFN stipulates that the U.S. will pay the lowest price for certain Medicare-covered drugs among the following wealthy, developed nations that are part of the Organization for Economic Co-operation and Development (OECD): Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Iceland, Ireland, Israel, Italy, Japan, Republic of Korea, Luxembourg, Netherlands, New Zealand, Norway, Spain, Sweden, Switzerland, and the United Kingdom.

By paying the lowest price for prescription drugs among these countries, Trump expects Americans to save between 50% and 80% on their prescriptions.

The rule was supposed to take effect at the start of this year, although the Department of Health and Human Services (HHS) would continue to consider feedback from relevant stakeholders until January 26, 2021. However, the implementation of MFN will be stalled for 14-days.

Judge Catherine Blake of the District Court of Maryland granted a nationwide temporary restraining order against the MFN rule. According to the lawsuit, “The Centers for Medicare and Medicaid Services (CMS) did not provide the usual notice and comment period prior to promulgation of the rule. Instead, it found there was good cause to waive both the notice and comment period and the delay in effective date required under the Administrative Procedure Act (the “APA”) and the Social Security Act because ‘delaying implementation of this [rule] is contrary to the public interest[.]’”

CMS had argued that the need for affordable Medicare Part B drugs amidst the COVID-19 pandemic was reason enough to forgo notice and the comment period.

However, the plaintiffs – a bloc including community cancer centers and industry body PhRMA – contended that MFN will “cause immediate and irreparable harm to Medicare patients, healthcare providers, and pharmaceutical manufacturers,” requested a temporary hold on implementing the rule to allow for more time to prepare for the new pricing model and attempt to negotiate new contracts—all amid a pandemic that has been stressing health care systems worldwide.

District Judge Vince Chhabria of Northern California issued a similar ruling to Judge Blake, granting a nationwide preliminary junction.The Biotechnology Innovation Organization (BIO), the California Life Sciences Association (CLSA), and BIOCOM California filed a challenge against the HHS targeting a lack of notice or opportunity for public comment prior to the attempted implementation of the policy, and an acknowledgment from the HSS, in its own rule, that it is unable to estimate the policy’s potential impact on patients and providers. The complaint also claimed that HHS lacks the authority to issue an administrative decree that makes broad changes to the statutory Medicare rules.

The agency never published a notice of proposed rulemaking, ruled Chhabria, the court unconvinced by the government’s argument for bypassing necessary legal steps due to the pandemic.

A restraining order and preliminary injection were found to be in the best public interest, as opposed to fully implementing the MFN rule, which has been forecasted by EVERSANA data analysts to significantly impact the prices of drugs in the U.S.

During the two-week injunction, the Court will evaluate the legality of the MFN rule.

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