October 12, 2021 is the deadline to comment on a Centers for Medicare and Medicaid Services (“CMS”) proposal to rescind and remove its controversial its Most Favored Nation (MFN) Model interim final rule, 42 CFR part 513 (the MFN Model Rule”) .

Published in the Federal Register on November 27, 2020, and effective the same day but blocked from taking effect by injunctions issued in a series of lawsuits. the MFN Model Rule which sought to implement a most favored nation (“MFN”) Model for setting Medicare prescription drug prices furnished in a hospital inpatient setting.

CMS adopted the MFN Model rule to try control drug prices in the Medicare Part B Fee For Service (“FFS”) program.

Noting the United States often pays twice the price for inpatient hospital drugs as paid in other countries, the MFN Model Rule sought to capture discounts on prescription drug prices enjoyed in other countries by replacing the methodology in section 1847A of the Social Security Act that generally sets Medicare payments payment for Part B prescription drugs based on the average sales price (ASP) plus a statutorily mandated 6 percent add-on using only the prices that manufacturers charge to certain U.S.-based purchasers.

The MFN Model Rule would have replaced this formula with a 7-year nationwide, mandatory MFN Model, under section 1115A of the Act, with the model performance period beginning on January 1, 2021. The MFN Model would test an alternative way for Medicare to pay for certain Medicare Part B single source drugs and biologicals (including biosimilar biologicals).

Even before it’s comment period closed, the MFN Model Rule was riddled by litigation challenges from four lawsuits filed in December. 2020 related to CMS’s waivers of proposed rulemaking and delay in effective date as well as other aspects of the MFN Model that resulted in injunctions preventing the Rule from taking effect.

Given that the nationwide preliminary injunction precluded implementation of the MFN Model on January 1, 2021, as contemplated, that multiple courts found procedural issues with the MFN Model Rule, and that stakeholders expressed concern about the model start date, CMS now proposes to rescind the MFN Model Rule and remove the associated regulatory text at 42 CFR part 513.

Along with its proposal to rescind the MFN Model Rule, CMS also plans to explore options to lower the prices of and improve access to prescription drugs and biologicals by increasing competition in response to President Biden’s July 9, 2021 Executive Order on Promoting Competition in the American Economy.

Comments on the proposed rescission of the MFN Model Rule are due by October 12. For instructions on how to comment, see here.

More Information

This article is republished by permission of the author, Cynthia Marcotte Stamer.  To review the original work, see here.

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About the Author

Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years working as an on demand, special project, consulting, general counsel or other basis with domestic and international business, charitable, community and government organizations of all types, sizes and industries and their leaders on labor and employment and other workforce compliance, performance management, internal controls and governance, compensation and benefits, regulatory compliance, investigations and audits, change management and restructuring, disaster preparedness and response and other operational, risk management and tactical concerns.

Most widely recognized for her work with health care, life sciences, insurance and data and technology organizations, she also has worked extensively with health plan and insurance, employee benefits, financial, transportation, manufacturing, energy, real estate, accounting and other services, public and private academic and other education, hospitality, charitable, civic and other business, government and community organizations. and their leaders.

Ms. Stamer has extensive experience advising, representing, defending, and training domestic and international public and private business, charitable, community and governmental organizations and their leaders, employers, employee benefit plans, their fiduciaries and service providers, insurers, and others has published and spoken extensively on these concerns. As part of these involvements, she has worked, published and spoken extensively on these and other human resources, employee benefits, compensation, worker classification and other workforce and other services; insurance; health care; workers’ compensation and occupational disease; business reengineering, disaster and distress; and many other performance, risk management, compliance, public policy and regulatory affairs, and other operational concerns. 

A former lead advisor to the Government of Bolivia on its pension  project, Ms. Stamer also has worked internationally and domestically as an advisor to business, community and government leaders on these and other legislative, regulatory and other legislative and regulatory design, drafting, interpretation and enforcement, as well as regularly advises and represents organizations on the design, administration and defense of workforce, employee benefit and compensation, safety, discipline, reengineering, regulatory and operational compliance and other management practices and actions.

Ms. Stamer also serves in leadership of a broad range of professional and civic organizations and provides insights and thought leadership through her extensive publications, public speaking and volunteer service with a diverse range of organizations including as Chair of the American Bar Association (“ABA”) Intellectual Property Section Law Practice Management Committee, Vice Chair of the International Section Life Sciences and Health Committee, Past ABA RPTE Employee Benefits & Other Compensation Group Chair and Council Representative and current Welfare Benefit Committee Co-Chair, Past Chair of the ABA Managed Care & Insurance Interest Group, past Region IV Chair and national Society of Human Resources Management Consultant Forum Board Member,  past Texas Association of Business BACPAC Chair, Regional Chair and Dallas Chapter Chair, former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation and many others.

For more information about these concerns or Ms. Stamer’s work, experience, involvements, other publications, or programs, see www.cynthiastamer.com,  on  Facebook, on LinkedIn or Twitter or e-mail here.

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