ACR applauds CMS' decision to withdraw the "Most Favored Nation" payment model for Part B drugs

Reviewed by Emily Henderson, B.Sc.Aug 11 2021

The American College of Rheumatology today applauded the Centers for Medicare and Medicaid Services' decision to withdraw a proposed rule to implement the "Most Favored Nation" (MFN) payment model for Part B drugs. Leaders felt the policy would have dramatically disrupted patient access to critical therapies needed to manage rheumatic diseases and conditions while threatening the financial solvency of many rheumatology practices – particularly those located in rural and under-served areas that have been hardest hit by the COVID-19 pandemic.

CMS' decision is a huge victory for the millions of rheumatic disease patients who stood to lose access to needed therapies under this model and have that loss counted as part of the "savings" the model was projected to generate. I'd like to extend a special 'thank-you' to all the ACR members, staff, volunteers and patient advocates who made their voices heard with policymakers about this issue."

David Karp, MD, PhD, President of the ACR

Almost 700 ACR advocates individually shared their concerns with CMS about the MFN model during the agency's open comment period – by far the most who have ever engaged on a single regulatory issue.

First proposed by CMS last November and set to begin in January 2021, the model's implementation was delayed by a federal judge in December and then put on hold by the Biden Administration. Last week, CMS announced that it was formally withdrawing the proposal and issued a new rule to that effect.

The MFN model would have created a mandatory, seven-year payment model for the 50 highest-cost drugs and biologics in Medicare Part B to replace the current reimbursement formula for these drugs. Instead of adding a 6 percent administration fee to the average sale price (ASP) of the drug, the new reimbursement system would have been based on international pricing information from 22 different countries. Providers would have been reimbursed the "most favored nation" price for the drug plus a fixed payment to cover the cost of procuring, storing, handling and administering these therapies – regardless of whether the new price covered the overhead costs incurred by medical practices to acquire and administer these therapies.

According to estimates released with the rule, CMS expected reimbursements to be reduced by 65 percent once the model was fully implemented if manufacturers continued their current pricing structures. The agency also acknowledged that a significant portion of the projected savings from the model would come from patients losing access to care.

"We remain committed to working with CMS and other regulatory agencies on solutions to lower the cost of prescription drugs while ensuring people living with rheumatic diseases are able to continue accessing the care and therapies they need," Dr. Karp concluded.