Restraining Order Blocks CMS’ Drug Pricing Model | Healthcare Innovation

On Dec. 23, the U.S. District Court in Maryland issued a nationwide temporary restraining order for the Centers for Medicare and Medicaid Services’ controversial Most Favored Nation (MFN) drug pricing model. The injunction prevents the Trump Administration from implementing the rule for 14 days, allowing time for the court to evaluate the legality of the model. Prior to the injunction, the MFN rule would have been implemented on Jan. 1, 2021.

U.S. District Judge Catherine Blake said the administration had rushed implementation of the rule without providing time for public comment, a violation of the Administrative Procedure Act. The MFN experiment was announced as a plan to lower the cost of the top 50 physician-administered Medicare Part B drugs, including 38 of the top treatments used by oncologists/hematologists for cancer and blood disorders. It was issued without the required notice-and-comment rulemaking procedures, and without the statutorily required “good cause” to dispense with such procedures.

Oncology and hospital groups have argued that instead of holding drug companies accountable and lowering drug prices, the MFN model slashes payments to hospitals and community oncology providers for the drugs they must purchase to treat their patients. These cuts will ultimately lead to less access to care for patients and communities, said the American Hospital Association.

The temporary restraining order is part of a lawsuit filed December 4, 2020 by the Association of Community Cancer Centers (ACCC), the Pharmaceutical Research and Manufacturers of America (PhRMA), the Global Colon Cancer Association (GCCA) and National Infusion Center Association (NICA).

In a statement, ACCC President Randall Oyer said: “This a temporary victory for cancer patients and providers, yet we still have a way to go. It is important that any policies enacted don’t limit our ability to serve patients and their families. Poorly designed policies such as MFN can have devastating impacts on patients, particular those in rural and underserved areas who are vulnerable to changes that will limit the care they receive.”

The Association for Clinical Oncology (ASCO) applauded the temporary restraining order. “ASCO has opposed MFN since its release and we’re glad it will not go into effect at the start of the new year given the devastating impact it would have on individuals with cancer,” ASCO announced. The organization said that CMS’ own projections show that the model will cause 19 percent of beneficiaries to lose access to the MFN’s 50 targeted drugs, 38 of which are used to treat cancer. ASCO’s analysis finds that reimbursement cuts to four drugs commonly used to treat lung and other cancers would result in patients with lung cancer losing as many as 87,556 years of life due to their loss of access to these drugs over the model’s seven-year duration. “We urge CMS to withdraw MFN and to work with us to adopt policies that truly address the cost of care and improve Medicare beneficiaries’ access to cancer treatment,” ASCO stated. “Hopefully, this delay in the model’s implementation will be the first step toward a full withdrawal of the flawed rule.”

The Community Oncology Alliance (COA) charges that the MFN experiment is an attempt by the executive branch to thwart the constitutional authority of the legislative branch in bypassing existing statute, specifically Medicare Part B reimbursement established in the Medicare Modernization Act. In mandating what it calls a “model,” CMS relies on Section 1115A of the Affordable Care Act for its authority. But COA argues that CMS exceeds that authority by making the model mandatory in scope and affecting a “breathtaking” 95 percent of all Medicare Part B fee-for-service and nearly 80 percent of Part B drug spending. In its complaint, COA insists that CMS has no statutory authority in this case to waive any requirements of the Medicare law, especially the Part B drug reimbursement provisions. 

“This Constitution-bending, lawbreaking experiment is a gross abuse of power that will not lower drug prices but will endanger the lives of seniors and put a dagger in the back of community cancer care – all during a public health emergency when oncologists and other physicians need all the support they can get,” said Ted Okon, COA executive director, in a statement.