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Most Favored Nation Drug Pricing Model

UPDATE: On January 13, 2021, a federal court agreed to a stay in the lawsuit filed by the Association of Community Cancer Centers (ACCC) and other organizations. ACCC’s challenge to the MFN Model has been placed on hold, by agreement with the government, because the government has decided to not appeal the preliminary injunction in the BIO/CLSA litigation that prevents CMS from implementing the model. The public comment period on the MFN Model interim final rule ends on Tuesday, January 26, 2021. Read more.

On Wednesday, December 23, a federal court issued a temporary restraining order (TRO) blocking the Center for Medicare & Medicaid Services from implementing its Most Favored Nation (MFN) Interim Final Rule on January 1, 2021. Read statement on TRO here.

On December 28, 2020, a second federal court blocked implementation of the MFN Model. This ruling blocks its implementation until CMS completes the rulemaking process, which requires the agency to solicit comments on a proposal and respond to those comments before implementing a new payment model. Read statement.

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On Friday, December 4, the Association of Community Cancer Centers (ACCC) joined the Global Colon Cancer Association, the National Infusion Center Association, and the Pharmaceutical Research and Manufacturers of America to file a lawsuit against the U.S. Department of Health and Human Services, seeking an immediate injunction to prevent the implementation of the Most Favored Nation (MFN) Model Interim Final Rule.

As Presidents of the 21 Chapter Members of the Association of Community Cancer Centers—known as the Oncology State Societies at ACCC—we are sharing our support for this legal action which was taken on behalf of the providers that our state societies serve, their patients, and our greater communities.

The Centers for Medicare & Medicaid Services (CMS) released the Most Favored Nation (MFN) Model Interim Final Rule with Comment Period (IFC) on Friday, November 20. The Model begins on January 1, 2021 and will operate for seven years. The first year of the demonstration includes 50 Part B drugs that encompass a high percentage of Medicare Part B drug spending. Instead of paying for these drugs based on the manufacturer’s average sales price (ASP), Medicare will pay the MFN price, which will be based on the lowest per capita Gross Domestic Product (GDP)-adjusted price of any country in the market basket.

If implemented, it will have a devastating impact on cancer programs across the country, and will reduce or eliminate Medicare beneficiaries’ access to quality care. Cancer programs and practices in rural and underserved areas that have a high proportion of Medicare patients may be forced to close, consolidate, and/or reduce critical services with the decrease in reimbursement and the increase in administrative burden if the Model goes into effect.

The request for an injunction by ACCC and the other organizations was based on CMS’s violation of the Administrative Procedure Act (APA), which requires an agency to issue a proposed rule, and allow for notice and comment from interested stakeholders, before a final regulation is published. CMS violated the APA by implementing the MFN Model through an interim final rule, with no Notice of Proposed Rulemaking, and no opportunity for public comment. Further, a waiver of notice and comment must be supported by a showing of good cause, which we believe CMS has failed to demonstrate.

Read ACCC's Statement on Litigation Challenging Legality of the Most Favored Nation Rule Download Full Legal Brief Christian Downs Headshot

"This Interim Final Rule is impractical, unworkable and does not address the reforms necessary to protect Medicare beneficiaries and strengthen the cancer delivery infrastructure. It will have a disproportionate impact on smaller hospitals and practices which are already struggling due to the COVID-19 pandemic and force them to curtail services and access to ensure their viability."

Christian G. Downs, JD, MHA,
Executive Director
Association of Community Cancer Centers