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CMS retreats from ‘most favored nation’ drug pricing scheme

By Brian Buntz | August 9, 2021

HHS LogoFormer President Trump’s plan to peg the price of some drugs to those paid in other developed nations was always controversial. Not long after Trump unveiled an executive order supporting the idea on Sept. 13, 2020, organizations, including PhRMA and Regeneron, filed lawsuits to block the rule.

Several courts agreed that the policy, which CMS codified in November 2020, had procedural issues. Namely, the agency provided less time for involved parties to comment on the rule than the Administrative Procedures Act prescribes.

HHS predicted the rule would save the federal government $85 billion over the next seven years.

Now, the Biden administration is moving to revoke the interim final rule that would have enacted the rule.

It remains unclear, however, what scheme to reduce drug pricing might follow. The Biden administration has stated that it is eyeing ways to reduce spending on Medicare Part B drugs.

The ‘most favored nation’ rule was not just unpopular with drug companies. Hospitals had also lamented that the plan would hurt their profitability by shifting the burden of cost reductions to them instead of the pharma industry or Medicare.

About The Author

Brian Buntz

The pharma and biotech editor of WTWH Media, Brian is a veteran journalist with more than 15 years of experience covering an array of life science topics, including clinical trials, drug discovery and development and medical devices. Before coming to WTWH, he served as content director focused on connected devices at Informa. In addition, Brian covered the medical device sector for 10 years at UBM. At Qmed, he overhauled the brand’s news coverage and helped to grow the site’s traffic volume dramatically. He had previously held managing editor roles on two of the company’s medical device technology publications. Connect with him on LinkedIn or email at bbuntz@wtwhmedia.com.

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