MFN Rule Likely Will Have Broad Impact on Health Care System

More than two years after first proposing the idea of pricing drugs on the U.S. market based on their prices in certain countries, the administration on Nov. 20 moved ahead with an interim final rule that would require implementation of this approach on Jan. 1. Two weeks later, industry groups filed a pair of lawsuits seeking to halt implementation. If the law goes into effect, it stands to have a wide-reaching impact on the health care system while having little effect on bringing down prices for consumers, say industry experts.

Implemented through the CMS Center for Medicare & Medicaid Innovation (CMMI), the most-favored-nation (MFN) model (85 Fed. Reg. 76180, Nov. 27, 2020) “will test whether more closely aligning payment for Medicare Part B drugs and biologicals…with international prices and removing incentives to use higher- cost drugs can control unsustainable growth in Medicare Part B spending without adversely affecting quality of care for beneficiaries.”

AIS Health Staff

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