The Biden administration plans to rescind a published but unimplemented Trump-era regulation that would peg Medicare Part B drug reimbursement for 50 expensive, physician-administered drugs on the lowest price that drug manufacturers get in similar countries. The widely criticized regulation is one of the rare instances where 340B providers and the drug industry see eye to eye.
The Trump administration published its Most Favored Nation interim final rule last November and it was scheduled to take effect on Jan. 1. Four lawsuits against the rule have been filed by the drug and biotech industries and independent cancer-treatment centers. Three federal district judges have temporarily enjoined the rule in whole or in part. The proposal was also panned by organizations representing 340B hospitals.
The U.S. Centers for Medicare & Medicaid Services (CMS) formally announced its intention to rescind the rule this morning. It posted the announcement for public inspection late last Friday afternoon. Comments on the rescission proposal are due Oct. 12.
“If finalized, our proposal would allow us to take time to further consider the issues identified by commenters and would address the November 2020 interim final rule’s procedural deficiencies by rescinding it,” CMS said. The decision to rescind the rule “does not
reflect any judgment by HHS regarding future policy,” it said.
Since 2018, CMS has reimbursed most 340B hospitals for separately payable drugs at a rate of average sales price minus 22.5%, which is almost 30% less than what it pays other hospitals.
Participation in the MFN payment demonstration model would be mandatory for 340B hospital outpatient departments reimbursed by Medicare. The interim final rule said 340B hospital reimbursement for the 50 drugs in the demonstration program would be whichever is less—the payment rate under MFN, or the rate under the OPPS cuts. It would be up to 340B hospitals, and other providers, either to get manufacturers somehow to agree to charge them less for the drugs included in the MFN demonstration program, or to absorb financial losses from lower Medicare reimbursement.
